BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: SB 1386 ----------------------------------------------------------------- |Author: |Wolk | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |3/28/2016 |Hearing |4/6/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Dan Brumbaugh | | | | ----------------------------------------------------------------- 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: SB 1386 (Wolk) Page 2 of ? 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 SB 1386 (Wolk) Page 3 of ? 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 SB 1386 (Wolk) Page 4 of ? 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 SB 1386 (Wolk) Page 5 of ? 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 SB 1386 (Wolk) Page 6 of ? 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 SB 1386 (Wolk) Page 7 of ? 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 SB 1386 (Wolk) Page 8 of ? 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 -- END -