BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                               Senator Wieckowski, Chair
                                 2015 - 2016  Regular 
           
          Bill No:            SB 1386
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          |Author:    |Wolk                                                 |
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          |-----------+-----------------------+-------------+----------------|
          |Version:   |3/28/2016              |Hearing      |4/6/2016        |
          |           |                       |Date:        |                |
          |-----------+-----------------------+-------------+----------------|
          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Dan Brumbaugh                                        |
          |           |                                                     |
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          SUBJECT:  Resource conservation:  working and natural lands

            ANALYSIS:
          
          Existing law:  
          
          1) Under the California Global Warming Solutions Act of 2006 (also  
             known as AB 32), requires the Air Resources Board (ARB) to (a)  
             inventory greenhouse gases (GHGs), (b) determine the 1990  
             statewide GHG emissions level, (c) approve a statewide GHG  
             emissions limit equivalent to that level to be achieved by  
             2020, (d) implement regulations that achieve the maximum  
             technologically feasible and cost-effective reduction of GHG  
             emissions, and (e) authorizes ARB to include market-based  
             compliance mechanisms, including a cap-and-trade program, in  
             the AB 32 regulations after considering the potential for  
             direct, indirect, and cumulative emission impacts from these  
             mechanisms. (Health and Safety Code, §38500 et seq.)

          2) Under the Greenhouse Gas Reduction Fund Investment Plan and  
             Communities Revitalization Act, establishes the Greenhouse Gas  
             Reduction Fund (GGRF) for proceeds from the cap-and-trade  
             program and authorizes moneys from the GGRF for, among several  
             explicit investment options, "funding to reduce greenhouse gas  
             emissions associated with water use and supply, land and  
             natural resource conservation and management, forestry, and  
             sustainable agriculture."  (HSC §39712 (c)(3)).

          This bill:








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          1) Declares it to be the policy of the state that the protection  
             and management of natural and working lands, as defined, is a  
             key strategy in meeting the state's greenhouse gas reduction  
             goals;

          2) Would require all relevant state agencies, departments, boards,  
             and commissions to consider this policy when revising,  
             adopting, or establishing policies, regulations, expenditures,  
             or grant criteria relating to the protection and management of  
             natural and working lands.

            Background
          
          1)Emissions reductions.  Over the last decade, California has  
            built on its history of policies to conserve energy and reduce  
            air pollution to initiate an effort to reduce its greenhouse gas  
            emissions to lessen the negative impacts of climate change.

            Governor Schwarzenegger's Executive Order S-3-05 specified GHG  
            emissions reduction targets of 2000 levels by 2010, 1990 levels  
            by 2020, and 80 percent below 1990 levels by 2050.  In 2015,  
            Governor Brown issued Executive Order B-30-15 that established  
            an additional intermediate emissions reduction target of 40  
            percent below 1990 levels by 2030.

            Because natural and working lands store ("sequester") carbon  
            from the atmosphere in above- and below-ground plant matter,  
            this sequestration contributes to net reductions of carbon  
            emissions.  In addition, active sequestration via the biosphere  
            and through various technological means will ultimately be  
            necessary to go beyond reducing the addition of GHGs to actually  
            eliminating carbon dioxide already in the atmosphere.

            The protection and management of natural and working lands has  
            been recognized as an important part of California's climate  
            initiative in reports by both the current and past  
            administrations.  An example of official recognition of the  
            importance of natural carbon sequestration includes the state's  
            2008 Climate Change Scoping Plan: A Framework for Change:

               California's forests will play an even greater role in  
               reducing carbon emissions for the 2050 greenhouse gas  
               emissions reduction goals.  Forests are unique in that  
               planting trees today will maximize their sequestration  








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               capacity in 20 to 50 years.  As a result, near-term  
               investments in activities such as planting trees will help us  
               reach our 2020 target, but will also play a greater role in  
               reaching our 2050 goals.  (p 64)

               Future land use decisions will play a role in reaching our  
               greenhouse gas emissions reduction goals for all sectors.   
               Loss of forest land to development increases greenhouse gas  
               emissions levels because less carbon is sequestered.   
               Avoiding or mitigating such conversions will support efforts  
               to meet the 2020 goal.  (p 65)

               Increasing carbon sequestration, including on working  
               rangelands, hardwood and riparian woodland reforestation,  
               also hold potential as a greenhouse gas strategies.  As we  
               evaluate the role that this sector can play in California's  
               emissions reduction efforts, we will explore the feasibility  
               of developing sound quantification protocols so that these  
               and other related strategies may be employed in the future.   
               (p 67)

             Although the carbon sequestration function of natural and  
             working lands is prone to be variable across geographies and  
             time, a growing body of scientific research is quantifying the  
             range of carbon sequestration values across natural and working  
             lands in California and elsewhere.

          2)Investment of cap-and-trade proceeds.  Proceeds from the  
            cap-and-trade program are available for appropriations from the  
            GGRF, with legislative direction for those appropriations  
            provided by AB 1532 (J. Pérez, Chapter 807, Statutes of 2012),  
            SB 535 (de León, Chapter 830, Statutes of 2012, and SB 1018  
            (Budget & Fiscal Review, Chapter 39, Statutes of 2012).  SB 1018  
            requires the Department of Finance to regularly update a  
            three-year investment plan that identifies feasible and  
            cost-effective GHG emission reduction investments to be funded  
            from the cap-and-trade auction proceeds.  SB 535 requires  
            minimum percentages of spending for emissions-reducing projects  
            that are specifically located in and otherwise benefit  
            disadvantaged communities.

            Based on the Governor's proposals, the Legislature has  
            authorized continuous appropriations from the GGRF for a number  
            of larger infrastructure and smart growth initiatives.  Other  








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            proposed appropriations from the GGRF have been decided within  
            the annual budget setting process.  Approximately 11 percent (or  
            $345 million out of $3,090 million) of the Governor's total  
            proposed GGRF expenditures for 2016-17 appear to be directed  
            towards managing natural and working lands, as defined in this  
            bill.


              ---------------------------------------------------------- 
             |Investment     |Department        |Program         |Amount|
             |Category       |                  |                |*     |
             |---------------+------------------+----------------+------|
             |Short-lived    |Departments of    |Climate Smart   |    55|
             |Climate        |Food and          |Agriculture -   |      |
             |Pollutants     |Agriculture       |Healthy Soils   |      |
             |               |                  |and Dairy       |      |
             |               |                  |Digesters       |      |
             |---------------+------------------+----------------+------|
             |Safeguarding   |Departments of    |Water & Energy  |    30|
             |California /   |Food and          |Efficiency      |      |
             |Water Action   |Agriculture &     |                |      |
             |Plan           |Water Resources   |                |      |
             |---------------+------------------+----------------+------|
             |               |Department of     |Wetlands and    |    60|
             |               |Fish and Wildlife |Watershed       |      |
             |               |                  |Restoration /   |      |
             |               |                  |CalEcoRestore   |      |
             |---------------+------------------+----------------+------|
             |Safeguarding   |Cal Fire          |Healthy Forests |   150|
             |California /   |                  |                |      |
             |Carbon         |                  |                |      |
             |Sequestration  |                  |                |      |
             |---------------+------------------+----------------+------|
             |               |                  |Urban Forestry  |    30|
             |---------------+------------------+----------------+------|
             |               |Natural Resources |Urban Greening  |    20|
             |               |Agency            |                |      |
              ---------------------------------------------------------- 
              ----------------------------------------------------------- 
             |TOTAL (* in millions of dollars)   |                |345   |
             |                                   |                |      |
              ----------------------------------------------------------- 

            Comments








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          1) Purpose of Bill.  According to the author, "The Governor  
             identified protection and management of natural and working  
             lands as a significant part of his strategy to reach the  
             state's 2030 emissions target, as these lands can sequester  
             significant amounts of carbon.

             "The California Department of Forestry and Fire Protection,  
             California Department of Fish and Wildlife, California  
             Department of Food and Agriculture, California Strategic Growth  
             Council, and other state bodies have programs in place to  
             reduce GHG emissions and undertake carbon sequestration on  
             natural and working lands using GGRF dollars.

             "SB 1386 codifies as state policy the Governor's strategy to  
             protect and manage natural and working lands as a key part of  
             the efforts to achieve our climate change goals.  The bill also  
             requires that all relevant state agencies consider this policy  
             when revising, adopting, or establishing policies, regulations,  
             expenditures, and grant criteria relating to the protection and  
             management of natural and working lands.

             "Not only will SB 1386 support future investment in carbon  
             sequestration projects on California's natural and working  
             lands, it will, at the same time, provide other important  
             public benefits for all communities including the protection  
             and enhancement of wildlife habitat, parks, greenways, and open  
             space; recreational and economic opportunities; production of  
             food and fiber; improvement of air and water quality; and flood  
             protection."

          2) Is the bill needed?  As mentioned above, some explicit  
             statutory recognition of the value of natural and working lands  
             for GHG reductions already exists within AB 1532.  In addition,  
             both Executive Orders S-03-05 and B-30-15 direct the major  
             relevant agencies to meet the state's GHG emission reduction  
             targets, and the latter Executive Order also states that  
             "natural infrastructure solutions should be prioritized."  SB  
             1386 would therefore follow these policy precedents to  
             strengthen the statutory basis for attention to the role of  
             protecting and managing natural and working lands in reducing  
             GHG emissions.

             Practically, to the extent that the relevant agencies involved  








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             in the protection and management of natural and working lands  
             are already interested in being considered for funding through  
             GGRF, they are already thinking of the ways that their programs  
             support the state's GHG reduction goals.  This raises the  
             question of what the bill, in its current form, is likely to  
             achieve that is not already occurring.

             To the extent that the bill establishes special consideration  
             of the natural and working land sectors for GGRF moneys, the  
             bill may become a precedent for other emissions-reducing  
             sectors to similarly seek general statutory recognition for  
             their importance.  Rather than prioritizing funding across  
             sectors in such a generic way, however, the Legislature may  
             find that prioritization is more effective after actual  
             evaluation of specific detailed project proposals for their  
             effectiveness in reducing GHG emissions and achieving other  
             benefits.
          
          3) Suggested amendments. 

             a)    The first two provisions of SB 1386 state the importance  
                of natural and working lands in meeting the state's emission  
                goals through the sequestration of atmospheric carbon, and  
                note the significant non-emissions reduction benefits (often  
                referred to as "co-benefits") potentially achievable via the  
                protection and management of natural and working lands.

                As both §9001.5 (a) and (b) are intended to provide  
                justification for the actionable provisions of the bill,  
                amendments are needed to move those provisions into an  
                uncodified section of the bill as findings and declarations,  
                and clarify the rationale for the bill's requirements.  

             b)    Section 9001.5 (c) requires relevant state agencies to  
                consider natural and working lands as a key strategy in  
                meeting the state's GHG emission reduction goals when  
                revising, adopting, or establishing policies, regulations,  
                expenditures, and grant criteria relating to the protection  
                and management of natural and working lands.

                Although various practices can have significant benefits in  
                terms of GHG emissions reductions, the ability of natural  
                and working lands to contribute to GHG emissions goals will  
                depend on the specific details and characteristics of  








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                individual projects.  Additionally, although not called out  
                for consideration by relevant agencies in SB 1386,  
                protection and management of natural and working lands can  
                have significant benefits in terms of adaptation and  
                resiliency to climate change impacts.  In fact, as increased  
                GHG emissions reductions and resiliency to climate change  
                impacts are both essential to an effective climate change  
                strategy, agencies should take a holistic approach to the  
                evaluation of mitigation and adaptation benefits for  
                proposed actions. 

                In practice, the reach of the bill will likely depend on how  
                the "relevant" agencies, departments, boards, and  
                commissions are identified, and how they choose to "consider  
                the policy" in developing their regulations, budgeting,  
                defining of grant criteria, and other decision making.   
                Additionally, the word consider is vague, and the  
                requirement in SB 1386 would not necessarily require  
                agencies to provide a more thorough evaluation or analysis. 

                Instead of simply considering natural and working lands as a  
                key strategy in meeting the state's GHG emissions, an  
                amendment is needed to specify that relevant agencies,  
                departments, boards, and commissions must analyze the  
                effects on climate change mitigation and adaptation, when  
                revising, adopting, or establishing polices, regulation,  
                expenditures, or grant criteria relating to the protection  
                and management of natural and working lands. 

            
          SOURCE:                    Defenders of Wildlife  

           SUPPORT:               
          Audubon California
          California Climate & Agriculture Network
          California ReLeaf
          California State Parks Foundation
          California Tahoe Alliance
          Environment California
          Lutheran Office of Public Policy - California
          Mono Lake Committee
          Pacific Forest Trust
          Save the Redwoods League
          Sierra Club California








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          The Nature Conservancy
          The Trust for Public Land
           
           OPPOSITION:    
          None received  

           ARGUMENTS IN  
          SUPPORT:

          Supporters note how Governor Brown highlighted in his 2015  
          inaugural address the management of natural and working lands as a  
          key strategy to reduce GHG emissions, but would like to better  
          codify recognition of this sector's importance within the larger  
          climate change mitigation enterprise.  Despite the existence  
          within many departments and other state entities of many carbon  
          sequestration programs using natural and working lands and funded  
          by GGRF, supporters worry that such policies may not last beyond  
          the current Administration.

          Statutory codification will also make it easier to achieve future  
          investments in the protection and management of natural and  
          working lands, which in turn will deliver both GHG reductions as  
          well as multiple other benefits.

           
           ARGUMENTS IN  
          OPPOSITION:    None  

                                            
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