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Climate Change

Final Vote – AB 398 California Global Warming Solutions Act of 2006: Market-Based Compliance Mechanisms

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Ag Council Supports Measure to Extend Cap and Trade

Bill Contains Critical Cost Containment Mechanisms Through 2030

July 17, 2017

The Honorable Eduardo Garcia
California State Assembly
State Capitol
Sacramento, CA 95814

Re: AB 398 (Garcia) – Support

Dear Assembly Member Garcia:

The organizations listed below, representing the California agriculture industry, wish to express our Support for your AB 398, regarding the California Global Warming Solutions Act of 2006 and market- based compliance mechanisms.

Last year, SB 32 was enacted, extending California’s Global Warming Solutions Act to 2030. It is important to note that SB 32 extended ARB’s authority to use command and control mechanisms to regulate greenhouse gas emissions (GHGs) into the future, with little consideration given to the costs of that measure to California’s citizens, consumers and economy. SB 32 was opposed by the agriculture industry and the larger job creation community in California because it did not attempt to balance its mandate with its economic impacts.

AB 398 finds this balance by creating a market-based mechanism that allows food processors regulated under SB 32 to meet their compliance obligations for reducing GHGs in a cost effective manner.

Specifically, AB 398:

  • Maintains current industry assistance levels that help food processors affordably comply with California’s GHG reduction mandate;
  • Develops a mechanism to establish a price ceiling to contain the cost of the sale of allowances purchased by food processors to meet their compliance obligations and limit the increased cost of the Cap and Trade Program to the agricultural industry and consumers;
  • Develop a Compliance Offset Protocol Task Force to create new offset opportunities in California, including in the agricultural industry;
  • Improve accountability of the California Air Resources Board by mandating additional oversight including an annual economic impact report by the Legislative Analyst’s Office;
  • Prioritizing spending of money collected through the Greenhouse Gas Reduction Fund by creating a specific order of projects to prioritize, starting with reducing air pollutants from stationary and mobile sources, sustainable agriculture and short lived climate

AB 398 also suspends the State Responsibility Area (SRA) fee as of July 1, 2017, until January 1, 2031. Since July 1, 2014, the SRA fee has been levied at the rate of approximately $150 per habitable structure unless their property is already covered by a local fire department, in which case the fee is $117 per habitable structure. This fee has been disproportionately placed on rural areas of the state and the suspension will greatly benefit rural residents of the state.

Further, AB 398 extends and expands the Manufacturing Sales and Use Tax Exemption that includes an exemption for research and development (R&D) equipment purchases from 2022 to 2030 benefiting food processing facilities.

Thank you for your work on this important issue

Sincerely,

Almond Alliance of California
Agricultural Council of California
Association of California Egg Farmers
California Association of Wheat Growers
California Association of Winegrape Growers
California Bean Shippers Association
California Citrus Mutual
California Cotton Ginners and Growers Association
California Dairies, Inc.
California Farm Bureau Federation
California Grain and Feed Association
California Pear Growers Association
California Poultry Federation
California Seed Association
California State Floral Association
California Tomato Growers Association
California Warehouse Association
Milk Producers Council
Nisei Farmers League
Pacific Coast Rendering Association
Western Agricultural Processors Association
Western United Dairyman

cc:
Honorable Edmund G. Brown, Jr.
Honorable Kevin De Leon
Honorable Patricia Bates
Honorable Anthony Rendon
Honorable Chad Mayes
Ms. Nancy McFadden
Ms. Camille Wagner
Honorable Members of the California State Senate
Honorable Members of the California State Assembly

 Ag Council Concerned ARB Proposal Shifts Emissions Out of State

November 4, 2016

Clerk of the Board
California Air Resources Board
1001 I Street
Sacramento, CA 95812
Submitted Electronically

RE: October 21, 2016 Workshop and the Informal Staff Proposal for the Industry Assistance Factor Calculation

Dear Chairwoman Nichols and Members of the Board:

Agricultural Council of California (Ag Council) and Dairy Institute of California appreciate the opportunity to submit comments in response to the October 21, 2016 workshop and the Informal Staff Proposal for the Industry Assistance Factor Calculation (Staff Proposal).

Ag Council is a member-supported organization advocating for more than 15,000 farmers across California, ranging from small, farmer-owned businesses to some of the world’s best-known brands. Ag Council works tirelessly to keep its members productive and competitive, so that agriculture can continue to produce the highest quality food for the entire world.

The Dairy Institute is a California dairy processor trade association founded in 1939. Dairy Institute represents milk and dairy processors on legislative, regulatory and economic policy.

A number of our member companies participate in the cap-and-trade program, and as a result, we wanted to take the opportunity to comment on two key points:

  • First, we strongly oppose the Air Resources Board’s (ARB) proposed post-2020 approach to allowance allocation that uses the non-peer reviewed results of two academic studies and continues to categorize food processing in the medium leakage category.
  • Second, we understand that ARB is considering adopting measures in response to Assembly Bill (AB) 197 and environmental justice (EJ) concerns. We would like to express our opposition to these new approaches because they are ill suited for the cap-and-trade program and will not advance the goals that we all share, including cleaner air, lower global greenhouse gas (GHG) emissions, and a growing economy.

CARB’S PROPOSED POST-2020 FRAMEWORK

At the onset of the cap-and-trade program, ARB devised an allowance allocation method that included emissions intensity and trade exposure metrics, which resulted in the food processing sector being designated as “medium” leakage risk. However, the original data collected by ARB failed to recognize that most of California’s food processing industry is highly seasonal and does not take into account the international competitive pressures of the world markets.

In 2011, Board Resolutions 11-32[1] directed staff to investigate potential improvements to the industrial allowance allocation to better meet the AB 32 objective to minimize emissions leakage to the extent feasible. In response, ARB commissioned three emissions leakage studies to inform the development of assistance factors (AFs) for allowance allocation. Two of these were broad-sector studies, which analyzed both international emissions leakage[2] and domestic leakage.[3] The third study specifically focused on production and emission leakage from California’s food processing industry.[4] The purpose of the third study, approved in Resolution 11-32, was to acquire the data necessary to determine an accurate AF for food processors, as the current leakage risk factors were not scientifically supported.

The results of all three studies were released in May 2016 and in August 2016, staff released Appendix E, Staff Report: Initial Statement of Reasons (August 2, 2016). In the opening second paragraph, staff states:

“In commissioning the three studies, staff had intended to develop a revised methodology by which revised AFs, not including transition assistance, could be calculated and applied in the third compliance period (2018-2020). These revised AFs would be at sector-specific levels necessary to minimize potential emissions leakage. After additional thought and discussion with stakeholders, staff decided to extend transition assistance through the third compliance period, at levels set in the 2013 regulatory amendments. Any revised AFs that may be proposed as part of 15-day comment period would be implemented starting in the fourth compliance period (post-2020).”[5]

In this statement, staff is giving new direction for the application of the leakage studies and on October 21, 2016 staff put out a proposal that outlines ARB’s revised methodology for calculating AFs. The new methodology is informed by the international and domestic leakage studies. Staff is not proposing to use the data from the food processing leakage study. When asked why, staff stated that the Hamilton et. al. study was too conservative and looked at data from research reports, not real world data. It is our understanding that data was collected from existing food processing facilities however, some of the assumptions were outdated. For example, in Ag Council’s September 19, 2016 comments, they pointed out that the authors cite milk utilization data from 2001, when there is more recent data available from CDFA.[6] Substantial public sector funds were spent to support this study and after many years of research, we urge ARB to revisit and review its findings. If the study was updated, it will likely demonstrate the inability to pass on the cost of this program in the food processing industry.

We have additional concerns that neither the international nor the domestic leakage studies look at market demand when estimating leakage and they do not take into account the uniqueness of producing food. The leakage studies should include an analysis on upstream and downstream cost impacts if ARB is to use the results of the leakage studies to calculate specific AFs for specific industries.

For example, California dairy processing plants currently participating in ARB’s cap-and-trade program are continually competing against both domestic and international competitors for those markets. Space in both markets is neither stable nor reliable, and is readily filled by the most price attractive competitor. The only factor reliably determining the successful competitor in either domestic or international markets is price. The costs imposed by regulatory compliance have been challenging for dairy processors and the proposed dramatic increase in those costs would be highly problematic. This is because such costs cannot be absorbed without making California dairy product processors much less competitive against their domestic and international counterparts, who do not carry such costs. The rationale that increased costs can be passed along or offset in domestic and international markets is disproven by the current situation, where California milk powder exports have dropped precipitously as California prices have remained higher than prices in competing Oceana and other powder supplying regions. As in the international space, domestic market sales are determined by competitive pricing. There is no offset or placeholder in either market when the cost of operation rises markedly above competitors.

We hope that ARB will reevaluate its AF methodology and implement the cap-and-trade regulation in a way that more accurately portrays the international and domestic pressures on the California agricultural sector. Failure to minimize leakage will not just have direct consequences for California food processing, its employees, and the communities that it supports; it will have a negative impact on global GHG emissions. As locally produced food declines in state and production increases out of state or abroad, it is likely that a more GHG intensive process will be used and emissions associated with shipping will increase overall GHG emissions. This outcome directly conflicts with ARB’s original purpose of analyzing and minimizing leakage risk at all.

ARB’s RESPONSE TO EJ CONCERNS

Due to a recently released research brief, A Preliminary Environmental Equity Assessment of California’s Cap-and-Trade Program[7] and the passage of AB 197, staff has been asked by Board Members at ARB to review program effectiveness for direct emission reductions. Therefore, staff is considering several potential program design changes.

Offsets Usage Limit

Staff is considering lowering the offset usage limit for post-2020. Offsets are a proven and cost-effective means of meeting AB 32 compliance obligations. They are also an effective means of achieving significant GHG emissions reductions here in California and globally, since carbon dioxide pollution knows no boundaries. ARB’s original parameters that GHG reductions due to offsets meet the criteria of being real, additional, quantifiable, permanent, verifiable, and enforceable, have slowed growth of the program. California is paving the way on climate change programs and as a result, is a global leader. It is important that California maintain and build a strong offset program to demonstrate to the world that offset programs can be successful. We should not continue to restrain the ability of offsets to reduce emissions. ARB should expand and expedite the use of offsets, which is consistent with ARB’s statutory obligation to achieve the maximum technologically feasible and cost-effective GHG emissions reductions.

Treatment of Unsold Allowances

Staff is considering changes to the treatment of unsold allowances by retiring some or all unsold allowances with vintage year 2020 or earlier. The cap-and-trade program was designed to address periods when allowance demand is low through an auction price stabilizing mechanism. It is very important that this change be subject to a cost-containment evaluation so that we continue to meet AB 32’s statutory objective, to develop market mechanisms as cost-effectively as possible.

Cost-Burden Approach

Staff is considering shifting to a cost-burden approach for the industrial allowance allocation methodology. We have questions with this new potential approach:

  • How would this approach take into account the current goal under AB 32 to minimize leakage?
  • How does this approach account for the ability of the agricultural industry, including food processors, to pass on regulatory costs to consumers, given domestic and international competition and continually fluctuating global markets?

Prior to shifting approaches, we urge ARB to study the impacts of these potential changes in an effort to minimize leakage.

In closing, we recommend that ARB hold off on implementing a decrease in assistance factors for post-2020. Our members haven’t even experienced the result of a decrease to 75 percent in the assistance factor that will occur in the third compliance period (2018-2020). It is not possible to predict the extent that the increase in carbon prices will affect food processing and more importantly emissions leakage. Before considering refining the assistance factor, ARB should at least keep the same assistance factor as the third compliance period for 2021-2023 and review actual emissions leakage data. Food processing plants carry with them billions of dollars in facility investment and thousands of employees. Regulatory uncertainty and change in direction that make producing food less viable are highly damaging and can prove irreversible.

We appreciate your consideration and the opportunity to comment. Our intention in these comments is to avoid simply shifting emissions to other locations outside of California. Should you have any questions or need anything further from us, please feel contact Rachael O’Brien at (916) 443-4887 or via email at Rachael@agcouncil.org.

Respectfully,

Emily Rooney
President
Agricultural Council of California      

Rachel Kaldor
Executive Director
Dairy Institute of California

Ag Council Comments on ARB’s Scoping Plan Concept Paper

July 8, 2016

Ms. Rajinder Sahota
California Air Resources Board
1001 I Street
Sacramento, CA 95814

Submitted electronically

RE: 2030 Target Scoping Plan Update Concept Paper

Dear Ms. Sahota,

The California Farm Bureau Federation and Agricultural Council of California (Ag Council) appreciate the opportunity to comment on the Air Resources Board’s (ARB) 2030 Target Scoping Plan Update Concept Paper, which outlines a strategy for how to achieve GHG reductions of 40 percent below 1990 levels by 2030.

Statutory Authority

As noted in the Concept Paper, California’s current climate program relies on a mix of an economy-wide cap with a market-based allowance trading system, accompanied by a suite of sector specific policies to reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020. Legislative approval is critical for moving forward on any post-2020 goals and developing 2030 strategies is premature given the lack of statutory authority. According to an April 2016 opinion from the California Office of Legislative Counsel, the ARB’s statutory authority in this area extends only to maintaining emissions at 1990 levels, with no existing authority to reduce emissions below that level. Therefore, in order to provide clarity to the program and related markets, the ARB must seek legislative authority to move forward in implementing a post-2020 program.

Cost Benefit Analysis

Before any additional GHG emission reduction targets are set, there must be a credible and independent marginal cost benefit analysis on the strategies adopted thus far in order to inform and guide greenhouse gas emission reductions post-2020. This will allow educated decisions that provide appropriate guidance to regulatory agencies and effectively oversee agency implementation to ensure that the costs and benefits of policy choices are realized.

California is still in the infancy of the climate change program enacted under AB 32, with the major rulemaking for reducing GHGs coming online in 2011. We have yet to see the full costs associated with its implementation, nor have we seen the impacts on jobs and businesses. We strongly believe that we need much more information in the way of costs, technological feasibility and an assessment of risks before we can take on potentially significant new and seemingly unachievable mandates.

Natural & Working Lands: Targets and Inventory

We are interested in ARB’s recognition of the significant work to lower emissions in the agricultural and natural lands sector. We welcome any support that helps us remain competitive globally while reducing emissions and sequestering carbon at the same time. We encourage ARB to advance funding opportunities, including, but not limited to, use of Cap and Trade proceeds to assist public-private partnerships to enhance carbon pools in natural and working lands. Collaboration will be key when developing an accounting framework and methodology for a comprehensive inventory of GHG fluxes from California’s natural and working lands. Since policies and their associated co-benefits for agricultural lands will be considered as part of the integrated strategy outlined in the Concept Paper, it is imperative that targets in this sector are done carefully, and we must first understand the long-term impact of various policy scenarios. Depending on how and if the state proceeds post 2020, we would want to work closely with ARB and the other appropriate state agencies on the Natural and Working Lands ideas replicated in each of the four concepts.

Choosing a Path Forward: Four Proposed Concepts

It is important to have a thorough economic and implementation analysis of each component of the current GHG strategy before the state embarks on any of the four proposed concepts.

Concept 1: This would be the closest proposal to business as usual under AB 32 and would clearly need legislative authority to continue past 2020. Cap and trade reporting is very onerous for small agricultural processors. If cap and trade is continued, a review of unintended consequences from criminalizing reporting and compliance obligation errors needs to be addressed. The additional staff requirements to conduct record keeping and certification of measurement equipment are burdensome to smaller capped entities. The reduction of electrical usage in combination with the mandates of the renewable portfolio standard is a double whammy that has significant impact. The state is conducting many GHG emission reduction complementary measures at once. Various State agencies are not acknowledging the compliance burden to manage these various efforts required at facilities with limited staff. This issue needs evaluation.

Concept 2: The industrial source focus would increase the monitoring, reporting and emission reductions with no flexibility provided in cap and trade to utilize offsets and allowances. It would put in place facility caps on agricultural operations that compete globally with other worldwide operations and have no similar mandates. Concept 2 is a recipe for leakage. It also proposes to enhance the proposed Short Lived Climate Pollutant Strategy. We have provided previous comments on this matter and such enhancements are not achievable.

Concept 3: While it is understood that transportation is the largest part of the state’s GHG inventory, it is the backbone of our economy. Goods movement and transportation are necessary to a healthy environment for every level of society. It is not clear where the funding for 100,000 zero emission vehicles and equipment would come from to meet the Sustainable Freight Strategy by 2030. It is not acceptable to assume these could in the form of mandates on industrial entities coupled with individual rules on each facility to require emission reductions during scheduled maintenance. It also proposes to enhance the proposed Short Lived Climate Pollutant Strategy. Again, we have provided previous comments on this matter and such enhancements are not achievable

Concept 4: More information on how a carbon tax would be implemented would be needed before we could provide any input on how this would impact the agricultural community. Our concern, as with any California GHG program, is how this impacts competiveness with other states and nations.

In closing, we recognize the importance of reducing emissions with incentives while continually evaluating cost-effectiveness and feasibility. This is important for measuring accurate progress in meeting the state’s goals as well as coordination between state agencies to avoid regulatory duplication. Lastly, please take into account the numerous other climate programs and mandates farmers are subject to as this is just one piece of the larger climate narrative and farmers have made much progress related to on-farm conservation practices.

We appreciate your consideration and the opportunity to comment. Should you have any questions or need anything further from us, please contact Cynthia Cory at ccory@cfbf.com and Rachael O’Brien at rachael@agcouncil.org.

Sincerely,

Cynthia L. Cory
Director, Environmental Affairs
California Farm Bureau

Emily Rooney
President
Agricultural Council of California

 

Ag Council Weighs-In Regarding Proposed Short-Lived Climate Pollutant Reduction Strategy

May 26, 2016

Mr. Richard Corey
Executive Officer
California Air Resources Board
1001 “I” Street
Sacramento, CA 95814

Re: California Air Resources Board Proposed Short-Lived Climate Pollutant Reduction Strategy

Dear Mr. Corey:

Agricultural Council of California (Ag Council) and the California Farm Bureau Federation (Farm Bureau) appreciates the opportunity to submit comments based on the California Air Resources Board’s (CARB) Proposed Short-Lived Climate Pollutant (SLCP) Reduction Strategy (Proposed Strategy).

The focus of our comments is the detrimental impact the SLCP Proposed Strategy will impose on California dairy farms when pursuing the methane-reducing technologies that have been identified. We believe that initiating a rulemaking process predicated on unachievable emission targets will lead to significant leakage as dairy production moves out of the state, therefore defeating a major tenet of AB 32. We request that CARB instead support sufficient incentives and research to continue and expand our abilities to reduce SLCPs from dairy farms while preserving the economic and social benefits of a healthy dairy community that can stay in California.

Reducing Methane Emissions

Dairy Manure Targets

It is important to note that no one strategy will work for all dairies. California’s dairy industry is considerably diverse, with
farm scales, management systems, land types, business structures, and regulatory requirements varying significantly from region to region. State involvement should be designed to benefit dairy operators across many contexts, helping all dairies prepare for the challenges ahead.

The SLCP Proposed Strategy to reduce methane emissions from dairy manure management by at least 20 percent by 2020, 50 percent by 2025, and 75 percent by 2030 is overly ambitious and unrealistic. These reductions would be difficult to achieve under perfect circumstances, let alone under the imperfect situation that currently exists as it relates to dairy digester development in California. Significant economic and other barriers exist, as identified in the proposed strategy, which have precluded large-scale adoption of dairy methane reduction strategies. The idea that several hundred dairy digesters could be operational by 2025 and possibly over 600 by 2030 is not possible and sets both the state and dairy families up for failure.

Far more research is needed to identify, validate and quantify opportunities for dairy methane reduction, remove economic barriers and obstacles to their implementation as well as understanding the cross-media environmental impacts of these technologies. This same information is needed to chart realistic timeframes for achieving the reductions. We request that CARB revisit these goals to set targets that are more practical and achievable.

Proposed Regulation

The Proposed Strategy states that CARB plans to initiate a rulemaking process to reduce manure methane emissions in 2017 to be in place by 2025. This regulatory approach is irresponsible, and we are strongly opposed to this proposed pathway. CARB should not be setting goals prematurely and should not be discussing potential regulation of dairy methane emissions until the path to those reductions is fully understood. Consideration of regulating the dairy industry for methane emissions at this juncture is reckless and could lead to significant leakage and other unintended consequences, including potential cross-media environmental impacts.

We are particularly concerned about the potential loss of greenhouse gas (GHG) and Low Carbon Fuel Standard (LCFS) credits for the entire sector if dairies are regulated, which would have far-reaching implications for already strained dairy digester economics by eliminating a significant revenue stream. CARB should complete a full and transparent economic and technological evaluation to determine a set of approaches that are effective in achieving reductions before predetermining a regulatory framework that is fraught with inaccurate assumptions.

The state of the dairy industry across California, where dairies get some of the lowest prices in the country for their milk, is already tenuous. In the past decade, about 600 California dairies have shut down — 32 just last year — and more could close this year. And it’s not just the milk pricing at issue here. The increasing number of burdensome and costly regulations are taking their toll.

The SLCP Proposed Strategy recognizes the potential for leakage, yet proposes a timeline and regulatory path that will exacerbate the departure of California dairies to other states. The state is not providing the national and world leadership it claims if its policies are simply exporting GHG emissions to other states and countries where emissions will likely increase and exacerbate global warming, while simultaneously driving jobs and valuable agricultural production and processing out of state.

Barriers to Adoption

A number of issues will need to be addressed by CARB, and other sister agencies to facilitate wide-scale adoption and development of dairy methane reduction strategies in California. Specifically, the dairy digester industry in California is still in its infancy and a number of factors have contributed to a low installation rate of methane digesters in California since the Compliance Offset Protocol Livestock Projects took effect in 2011. Digester projects are expensive with high equipment and installation costs. There are conflicting permitting and other regulatory requirements in the state, including air quality standards for Best Available Control Technologies (BACT) and requirements for NOx that have prevented some existing methane digesters from upgrading engines or expanding digesters. The lack of, or difficulty accessing net metering in some areas of the state, as well as with some energy providers, has led to difficulties relating to digesters. In addition, there are variable technological and operational challenges associated with methane digesters.

Programs and opportunities in the state that would facilitate the ability of operators to rely on digesters as a source of compensation from the production of energy are in transition. In geographic areas served by California Public Utilities Commission (CPUC) jurisdictional utilities, the net metering statute will soon operate under a new framework. Although the ability to consolidate multiple accounts to offset the energy generated from a digester can prove effective, the new framework reduces the cost benefits to the customer and it is not clear how effective it will be in the future to rely on net metering for digesters. In areas where publicly owned utilities provide energy service and establish their own net metering frameworks, those utilities are reaching the limits of requirements to offer net metering to customers and – in some instances – have indicated plans to discontinue net metering options.

Without net metering, customers must rely on power purchase agreements. Last fall the CPUC issued a decision implementing a bioenergy feed-in tariff mandated by Senate Bill 1122 (Rubio), Stats. 2012, Ch. 612. It requires California’s three large investor-owned electric utilities (IOUs) to procure 250 megawatts of RPS-eligible generation from bioenergy generation facilities including dairy and other agricultural bioenergy, as well as from other sources. However, issues continue to arise regarding the tariff, such as the parameters for interconnection of the facility to the grid. Outside of those territories there are no clear guidelines about the prioritization of bioenergy for procurement or energy. Without clear pathways to underwrite the development of digesters, operators face large, unknown costs.

Extensive financing from the Greenhouse Gas Reduction Fund (GGRF) and other incentive funding is a cornerstone of the SCLP Proposed Strategy. The $35 million in the Governor’s proposed 2016-16 budget from the GGRF and the $500 million over 5 years proposed by the California Department of Food and Agriculture (CDFA) represents an essential start, but given ongoing legal challenges, auction volatility and uncertainties, reliance on the GGRF cannot be assured. The economic assessment in Chapter VIII and Appendix D portray project lifetime costs that are barely feasible with tenuous incentives, and clearly negative lifetime costs without. There are many flawed and vague economic assumptions throughout the five dairy methane emission reduction strategies. For instance, Strategy 4 is based on digesters using microturbines to generate electricity. Microturbines are significantly more expensive and have no track record of reliability for use on digesters in California.

We support the development of a financial working group of stakeholders as an imperative initial step. A thorough vetting of the UC Davis (February 2016) and Sustainable Conservation (July 2015) reports that were used for the economic assessment of the five dairy strategies would be a key first task of this group.

 Continued Research on Emission Reduction Potential

There still remain many data gaps in our efforts to understand and evaluate potential mitigation measures for SLCPs. More research is needed to fully determine the viability of these strategies in California and assess their associated costs and benefits.

  • Adoption of manure “scrape” systems may be an option for some dairies. Immediate research is necessary to quantify the GHG reduction potential of moving from flush to scrape systems and potential impacts to water quality and air quality for such conversions. If justified by research, a reduction protocol will need to be approved to facilitate and incentivize adoption. Appropriate incentive funding should also be provided once the cost and benefits are more fully understood.
  • Improved separation of manure solids may also provide quantifiable methane reduction. Immediate research to fully understand and estimate that potential will be needed. Furthermore, a reduction protocol should be approved if justified by research.
  • Fully monetize the benefits of manure composting and digesting. Fertilizer and amendment products and markets must be developed to realize this potential revenue stream and enhance projects’ economics.
  • A comprehensive account of the numerous other climate programs and mandates farmers must comply with as part of the larger climate narrative. The agricultural community has made noteworthy progress related to on-farm conservation practices.

Dairy Enteric Targets

Enteric emission reduction targets are also of concern to the dairy sector. The industry has made great strides over the past several decades to improve feeding and breeding to greatly reduce the GHG footprint of each gallon of milk produced in California. As recognized by CARB, California’s dairy sector is already highly efficient. Thus further reductions in enteric emissions will be difficult to achieve and will also require significant research.

Conclusion

In closing, we recognize the potential of reducing methane emissions with incentives while continually evaluating cost-effectiveness and feasibility. Unfortunately, the SLCP Proposed Strategy is headed dramatically in the opposite direction and needs significant revision if it is to be a successful effort. Instead of unfounded regulatory mandates, we ask that research be completed and reviewed by key stakeholders to close the numerous information gaps and provide a complete and realistic understanding of the costs, benefits, impacts and feasibility of all recommended methane emission reduction strategies. This is essential for measuring accurate progress in meeting the state’s goals as well as coordination between state agencies to avoid regulatory duplication.

We appreciate your consideration and the opportunity to comment. Should you have any questions or need anything further from us, please contact either Rachael O’Brien at (916) 443-4887 / Rachael@agcouncil.org or Cynthia Cory at (916) 446-4647 / ccory@cfbf.com.

Respectfully,

Emily Rooney
President
Agricultural Council of California

Cynthia L. Cory
Director, Environmental Affairs
California Farm Bureau Federation

CC:      Members of the Air Resources Board
Ryan McCarthy, Chair’s Office
Emily Wimberger, Chief Economist
Dave Mehl, Manager, Energy Section
Marcelle Surovik, Staff Air Pollution Specialist
Glenn Gallagher, Staff Air Pollution Specialist

Ag Council Supports AB 21 to Require Legislative Oversight and Approval of Emissions Reduction Targets

April 7, 2015

The Honorable Das Williams
Chair, Assembly Natural Resources Committee
California State Capitol
Sacramento, CA  95814

RE: AB 21 (Perea) – Support

Dear Assembly Member Williams:

The listed organizations SUPPORT AB 21 that lays out the path to California’s continued role in leading the fight against global climate change in a responsible manner.

AB 21 directs the California Air Resources Board (ARB) to recommend a 2030 target for cost-effective statewide greenhouse gas (GHG) emissions reductions to the Legislature and the Governor by Jan. 1, 2018 and consult with other state agencies regarding energy efficiency and electrification of the transportation system.

Given the potential economic impact of climate change policy, legislative oversight and approval of emission reduction targets is appropriate and necessary. Since AB 32 was signed into law with the expectation that other national, sub-national and regional government partners would join with California, we have only seen the Canadian Province of Quebec officially link with our cap-and-trade program. For California to lead in the fight against global climate change, it is critical that the policies and regulations adopted serve as a model for other partners within the United States and also beyond.

This bill permits California to maintain a leadership by tapping into the knowledge at the ARB and other agencies to make recommendations on post-2020 climate change policy. It is the job of legislators to make the decision when it comes to balancing the needs and health of the economy with the goal of reducing GHG emission and reducing climate impacts.

If you have any questions, please contact Michael Shaw, VP Government Relations, with the California Manufacturers & Technology Association at 916-498-3328 or MShaw@cmta.net.

We respectfully request your “AYE” vote on AB 21.

Sincerely yours,

Agricultural Council of California
California Asian Pacific Chamber of Commerce
California Business Properties Association
California Business Roundtable
California Chamber of Commerce
California Manufacturers & Technology Association
California Retailers Association
Industrial Environmental Association
National Federation of Independent Business

cc: Assembly Member Henry T. Perea
Members, Assembly Natural Resources Committee
Lawrence Lingbloom, Chief Consultant, Assembly Natural Resources Committee
John Kennedy, Consultant, Assembly Republican Caucus

Ag Council Comments on ARB Scoping Plan Update

April 6, 2016

Mary D. Nichols
Air Resources Board Chair
California Environmental Protection Agency
1001 “I” Street
Sacramento, CA 95814

RE: 2030 Target Scoping Plan Update; Healthy Landscapes 2030: California’s Climate Vision Goals for Natural and Working Lands

Dear Ms. Nichols:

The California Farm Bureau Federation and Agricultural Council of California (Ag Council) appreciate the opportunity to comment on the discussion document and inform the development of the 2030 Target Scoping Plan Update. The draft goals and strategies for natural and working lands presented for California’s climate change vision, are reasonable and reflect the limited baseline data available at this time.

Vision

Protect farmland, rangeland and forests from conversion so that these landscapes can continue to provide carbon storage, jobs, food, fiber, wildlife habitat, and clean water and air. Protection strategies will differ by land type and region, as each faces localized productivity, stability and development threats.

California’s farmland is a critical resource that provides over 400 diverse commodities and has multiple benefits including food security and economic strength. Farmland also has a critical role in California’s climate change mitigation and adaptation strategies.

Consideration of how to reduce the rate of land conversion to development is a good starting point. Private landowners will be encouraged to implement best practices to improve soil biomass carbon sequestration rates if the proper incentives are in place and targets are developed that allow the state to measure progress as opposed to a prescriptive approach that – if not achieved – will result in regulatory backlash.

Guiding Principles

Maximize funds for natural and working land strategies through alignment and leveraging of federal, state and private funds for public and private land conversion, infrastructure, and development.

This final principle is especially important and the agricultural community has achieved great success using this model when the state and local air districts, in combination with the federal government, apply financial assistance to help accelerate the use of conservation practices.

For example, during 2015, California’s farmers, working with the United States Department of Agriculture’s (USDA) Natural Resources Conservation Service (NRCS), voluntarily entered into contracts, matched agency incentives and applied conservation practices such as treating unpaved farm roads to reduce dust and replacing older, higher polluting off-road mobile farm equipment with newer, cleaner models to reduce criteria pollutants.

This will be a natural alliance since it has been recognized that combining the work already accomplished by USDA NRCS using their Conservation Practice Standards, in combination with the Comet-Farm and Comet-Planner tools, will be a valuable resource for implementing the farmland and ranch goals. Not only are growers familiar with and comfortable using the USDA NRCS practice standards, but the years of work that have gone into these quantification tools will provide a GHG quantification platform that would take the California Air Resources Board (ARB) years and significant financial resources to try and develop on their own.

Farmlands and Ranchland Draft Goals

Fulfill the Healthy Soils Initiative, an interagency plan announced by Governor Brown in 2015, to reduce GHG emissions and improve drought resiliency by updating farm and ranchland practices to build soil organic matter.

Focusing on fulfilling the Healthy Soils Initiative and promoting farm and ranch management practices to sequester carbon and reduce greenhouse gases (GHGs) is the right approach as it combines the flexibility needed for living ecosystems and the large diversity of crops grown in California

Promote on-farm and ranch management practices that sequester carbon or reduce GHGs.

The USDA Building Blocks for Climate Smart Agriculture and Forestry should also be utilized as an approach as ARB looks for more direction to measure progress for adoption of practices. As the U.S. government is using a 2005 baseline, we urge ARB to adopt the same baseline for the 2030 quantification efforts so federal and state efforts align. A review of the adoption of key NRCS practice standards in California that have known GHG reduction benefits indicate a preliminary target for agricultural lands could be 750 MT CO2e by 2030 using a 2005 baseline. This goal considers past adoption rates, legacy effect and no backsliding and could only be achieved with a full commitment of incentives from state and federal sources.

Innovate

The list of implementation actions in this section is well conceived and thorough. However, it is imperative that as this discussion draft gets built out that the goals for employing practices and emission reductions technologies at dairies remain voluntary.

A cooperative voluntary program could reduce dairy GHG emissions by several million tons of carbon dioxide equivalent GHG emissions annually, in addition to other indirect air and water quality improvements, criteria pollutant reductions and benefits to disadvantaged communities.

In closing, we recognize the importance of reducing emissions with incentives and building up substantial carbon in soils while continually evaluating cost-effectiveness and feasibility. This is important for measuring accurate progress in meeting State’s goals as well as coordination between state agencies to avoid regulatory duplication. Please take into account the numerous other climate programs and mandates farmers are subject to as this is just one piece of the larger climate narrative and farmers have made much progress related to on-farm conservation practices.

We appreciate your consideration and the opportunity to comment. Should you have any questions or need anything further from us, please contact Cynthia Cory at ccory@cfbf.com and Rachael O’Brien at rachael@agcouncil.org.

Sincerely,

Cynthia L. Cory
Director, Environmental Affairs
California Farm Bureau

Emily Rooney
President
Agricultural Council of California

cc: Jennifer Lester Moffitt, CDFA

 

ARB Proposes Short-Lived Climate Pollutant Reduction Strategy

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The California Air Resources Board (ARB) released its proposed Short-Lived Climate Pollutant (SLCP) Reduction Strategy on April 11. These pollutants trap heat at many times the level of carbon dioxide, but also tend to have a shorter lifetime in the atmosphere, ranging from a few days or weeks to about 10 years.

Unfortunately, the strategy continues to include the same methane reduction targets for the dairy industry that were in the draft strategy released last September, as well as a proposal to regulate dairies, though the regulatory proposal is no longer limited to new and expanding dairies.

In its reduction targets, ARB calls for a “75 percent reduction of dairy manure methane from 2013 levels by 2030,” and a “25 percent reduction in enteric (animal digestion) fermentation methane by 2030.” ARB maintains that these reductions are critical to the goal of reducing methane emissions by 40 percent in California by 2030. Ag Council sees this timeline as overly ambitious and worries the goals cannot be achieved through existing methane reduction measures, without adequate funding for dairy digesters.

The SLCP Reduction Strategy also includes a 40 percent reduction of hydrofluorocarbon gases (refrigerants and aerosols) and a 50 percent reduction in black carbon (soot) by 2030.

Ag Council has been highly engaged with ARB as it develops the strategy on SLCPs. We have attended ARB hearings, as well as meetings with regulatory staff, to discuss our members’ perspective. We also organized a dairy tour for key ARB staff and remain committed to highlighting the concerns of our members.

Methane
Methane is a major focus in the Reduction Strategy, and Ag Council is actively involved in this area on behalf of our members.  In its methane emissions inventory, ARB linked 25 percent of the state’s methane emissions to dairy manure, and 19 percent to enteric emissions. The SLCP Reduction Strategy calls for aggressively cutting manure methane emissions from dairies by at least 20 percent in 2020, 50 percent in 2025, and 75 percent in 2030.

In the Reduction Strategy, ARB continues to recognize the potential value of anaerobic digesters for capturing methane and creating biomethane for energy use, noting that digester use on dairies, “could lead to billions of dollars in investment and thousands of new jobs, concentrated in the Central Valley.” To realize these reductions, ARB acknowledges state funding will be needed.

To meet the proposed targets, ARB will open a rulemaking process to address dairy manure emissions once the SLCP Reduction Strategy is approved. Working with other state agencies and industry groups, the regulatory process will consider available financial incentives, market support, and potential economic impacts in order to identify appropriate timelines and requirements for the industry. The rulemaking will also look at additional research, mandatory reporting and record keeping, technology assessment, and incentives.

Ag Council is opposed to a mandate on dairies and has cautioned ARB that this proposed regulation could impose costs and may negatively impact the industry, should additional financial incentives not be provided.

Black Carbon
California has already reduced black carbon emissions by more than 90 percent in the last 50 years, primarily through the state’s stringent diesel regulations. Agriculture has actively participated in the reduction of black carbon emissions and achieved success through state and federal sources of funding.  The proposed SLCP Reduction Strategy highlights additional state efforts to continue reducing black carbon from agricultural irrigation pumps and off-road mobile agricultural equipment. ARB will continue to push forward concepts to achieve additional 2030 reductions through the California Sustainable Freight Action Plan and the State Implementation Plans. Ag Council is also engaged in these areas with ARB.

Hydrofluorocarbons (HFCs)
The SLCP Reduction Strategy acknowledges that the most effective way to achieve significant reductions in HFC emissions (refrigerants and aerosols) is a global phase-down of their use under the Montreal Protocol. If a global agreement is not reached, California will consider developing its own phasedown.

In the short-term, Governor Brown’s proposed budget includes $20 million for incentives to replace HFCs with alternatives. Examples include natural refrigerants such as ammonia, hydrocarbons, and CO2. ARB will also develop bans on the use of high emitting refrigerants where lower emitting alternates are feasible and readily available.

Next Steps
ARB will host a SLCP Reduction Strategy workshop on April 26 in Sacramento and May 3 in Bakersfield. Ag Council will participate in the Sacramento workshop. More information about the workshops is available HERE.

There will be an informational presentation of the SLCP Reduction Strategy to Air Board members on May 19.  However, the proposal will not be taken up for a board vote until the fall.

The proposed Reduction Strategy is available HERE.

Ag Council Weighs-In on Cap & Trade Investment Plan

November 13, 2015

Shelby Livingston
Chief, Climate Investments Branch
California Air Resources Board
1001 I Street
Sacramento, CA 95814

Re: Draft Cap-and-Trade Auction Proceeds Second Investment Plan

Dear Ms. Livingston:

Agricultural Council of California (Ag Council) appreciates the opportunity to submit comments on the Cap-and-Trade Auction Proceeds Second Investment Plan (Investment Plan).

Ag Council is a member-supported organization advocating for more than 15,000 farmers across California, ranging from farmer-owned businesses to the world’s best-known brands. Ag Council works tirelessly to keep its members productive and competitive, so that agriculture can remain California’s number-one industry and members can continue to produce the highest quality food for the entire world.

Ag Council’s members regularly seek out ways to improve the environment. Beyond any sort of regulatory requirements, most of the major food buyers around the globe demand it and it’s the right thing to do. As such, many of our members have made significant investments in order to operate the most efficient technology and equipment available to meet these goals, regardless of the status of Cap-and-Trade regulations. However, this industry has a void in cost-effective newer technologies to truly reduce emissions.

In 2012, Ag Council highlighted this concern before the California Air Resources Board (CARB). Ag Council outlined a practice example in our testimony, “one of our members evaluated a boiler replacement system that would generate super heated steam utilizing solar technology. This system would use solar power to fire boilers, instead of natural gas. Therefore, their emissions would be reduced to zero. For the steam required that would be needed for the height of the processing season, the investment cost would be $50 million. A power block would be required for the off-season at an additional cost. This estimate is more than five times their annual company-wide capital expenditure budget; meaning, should they make the investment, they couldn’t make any other improvements on any of their plants for the next five years. It is simply cost-prohibitive.”

Three years later, the adoption of new technology is still cost-prohibitive. Additionally, this type of technology requires significant upfront investment with a delayed and uncertain return. Owners and operators are in the difficult position of needing new technology to stay competitive or stay in compliance. Partnerships through cost-share grants or rebates on next generation technologies could incentivize further emissions reductions. Many food processors operate on a minimal profit margin for their products. These grants or rebates could assist in minimizing the economic constraints in making the investments in improved emissions technologies and renewable energy.

Additionally, agriculture can be an important source of renewable energy in the state. Through investments of Cap-and-Trade revenues, producers and processors can overcome barriers to installing projects such as those in the bio-energy arena that can generate combined heat and power from processing waste such as nut shells and wine grape pumice. These types of projects can potentially be created both at the farm level and at processing plants.

Efficient and effective investments of Cap-and-Trade auction proceeds through the Greenhouse Gas Reduction Fund (GGRF) are an essential part of the strategy to reduce emissions while maintaining a sustainable business climate in California. Building partnerships with entities already participating in the cap to further reduce emissions should also be prioritized.

GGRF investments in projects that target and reduce short-lived climate pollutants (SLCPs), (such as dairy manure digesters), programs that increase water use efficiency, and pathways for organic waste and woody biomass should be a top priority for the Investment Plan.

Dairy Manure Digesters

Ag Council notes that dairy manure digesters are already an integral component of the Investment Plan’s Natural Resources and Waste Diversion sector goals. Dairy anaerobic digesters are poised to become a larger contributor to California’s transportation fuel and renewable energy portfolio. By capturing and utilizing methane for use as a valuable renewable energy resource that can replace fossil fuel, digesters mitigate methane greenhouse gas (GHG) emissions and also help the industry adapt to a changing climate.

However, increased continued public investment is needed before digesters can become economically feasible. The Investment Plan should prioritize and recommend substantial long-term funding to build enough dairy digesters to meet methane reductions consistent with the state’s overall goal of 40 percent GHG reductions from 1990 levels by 2030. There is a direct relationship between the amount of GGRF investment and the number of dairy digesters that can be built to capture and destroy methane. Going forward, the Investment Plan should align its goals for reducing dairy methane emissions to meet AB 32 and SB 605 goals with the appropriate amount of GGRF investment to achieve that goal.

State Water Efficiency and Enhancement Program (SWEEP)

SWEEP promotes both climate change mitigation and adaptation through water management and energy efficiency, making agriculture more resilient to the impacts that climate change will have on water and energy resources. SWEEP provides grants for irrigation improvements that conserve water with energy efficiency components that reduce GHG emissions. These projects have allowed farmers to effectively manage water resources and create resiliency in their operations through the use of on-farm technologies. This program has been so successful and continues to be in high demand that according to the California Department of Food and Agriculture (CDFA) it is oversubscribed by 300 percent. It is critical to support our farmers to achieve water savings and GHG reductions. Ag Council requests that CARB prioritize funding to ensure continued operation of this program.

 Water-Energy Technology (WET) Program

The WET Program, created in response to the Governor’s Executive Order B-29-15, will provide financial assistance to implement innovative technologies on farms that will lead to water savings and reduced GHG emissions. The WET Program complements SWEEP by incentivizing conversion to technologies such as low pressure drip systems that can save water and reduce energy and GHG emissions. Funding for the WET Program was not included in the 2014-2015 legislative session. The launch of this program has been suspended until future funds are made available. We ask that CARB work closely with other agencies and industry stakeholders to highlight the benefits of this program and the need for GGRF funding.

Healthy Soils Initiative

The Healthy Soils Initiative is based on the premise of building soil organic matter to sequester carbon, increase water retention, improve air and water quality, reduce sediment erosion and dust, improve biological diversity and improve plant health and yields. These are worthy goals that can be achieved if sufficient incentives are provided to members of the agricultural community who are willing to take the time and effort to make additional, voluntary operational changes to implement management practices that will achieve these objectives. We ask that CARB work closely with CDFA to implement and fund the Healthy Soils Initiative.

Biomass Facilities

In the last twelve months alone, California has closed five biomass facilities due to expiring contracts and poor economics. The closure of these facilities poses a huge threat to agriculture and many farmers are wondering what they will do with their woody waste material. In the past, farmers would open pile burn the material in field but, this is certainly no longer an option given regulations on black carbon, GHG, and criteria pollutant emissions. Therefore biomass facilities became an economically and technologically feasible alternative.

Sending the waste to a landfill is not a realistic option. Not only would the sheer volume of material overwhelm a landfill facility, it is also completely counterintuitive with the state’s goal of decreasing our reliance on, and moving organics out of, landfills. For these reasons, we ask that CARB work closely with the California Public Utilities Commission to prioritize funding to ensure continued operation of biomass facilities.

In closing, Ag Council recognizes the importance of reducing GHGs with incentives while continually evaluating cost-effectiveness and feasibility. We believe it is imperative to be engaged and to promote these crucial investments to ensure we remain the number-one agricultural state while we continue to work to reduce our environmental footprint.

We appreciate your consideration and the opportunity to comment. Should you have any questions or need anything further from us, please feel contact Rachael O’Brien at (916) 443-4887 or via email at Rachael@agcouncil.org.

Respectfully,

Emily Rooney
President

Ag Council Comments on Air Board’s Draft Strategy to Reduce Methane

October 30, 2015

The Honorable Mary D. Nichols, Chair
California Air Resources Board
1001 I Street
Sacramento CA 95812

RE:      Draft Short-Lived Climate Pollutant Reduction Strategy

Dear Chair Nichols:

Agricultural Council of California (Ag Council) appreciates the opportunity to submit comments based on the California Air Resources Board’s (CARB) Draft Short-Lived Climate Pollutant (SLCP) Reduction Strategy (Draft Strategy).

Ag Council is a member-supported organization advocating for more than 15,000 farmers across California, ranging from farmer-owned businesses to the world’s best-known brands. Ag Council works tirelessly to keep its members productive and competitive, so that agriculture can remain California’s number-one industry and members can continue to produce the highest quality food for the entire world.

While we appreciate the voluntary approach for existing dairies taken on dairy methane reduction strategies, we do have some significant concerns with the Draft Strategy. It is important to note that no one strategy will work for all dairies. California’s dairy industry is considerably diverse, with
farm scales, management systems, land types, business structures, and regulatory requirements varying significantly from region to region. State investment should be designed to benefit dairy operators across many contexts, helping all dairies prepare for the challenges ahead.

The Draft Strategy includes a stated focus on alignment of financial incentives with improved manure management practices. Ag Council supports the inclusion in the Draft Strategy of funding $100 million each year for the next five years, at a minimum, that will be required to help increase methane digester installation rates across the state.

New and Expanding Dairies

The regulatory approach proposed for “new and expanding” dairies is concerning and may have broad implications for all dairies in California. We are particularly concerned about the potential loss of greenhouse gas (GHG) credits for the entire sector if new and expanding dairies are regulated, which would have far-reaching implications for already strained dairy digester economics by eliminating a significant revenue stream. ARB should consider whether voluntary approaches could be more effective in achieving reductions in new and expanding facilities without causing leakage of California dairies to other states.

According to the Draft Strategy, CARB intends to develop a regulation by 2018 to require avoiding or capturing methane from manure management at new and expanded dairies. To encourage installation of methane digesters on existing dairies, Ag Council recommends that the Draft Strategy explicitly state that methane digesters installed on existing dairies after the 2018 regulations will still qualify to generate compliance offset credits under the Compliance Offset Protocol Livestock Projects, as long as they do not accompany an expansion of the dairy. This will avoid any confusion interpreting the regulation as applying to existing dairies within the state. In particular, since the footnote on Page 45 refers to “new projects” as opposed to “new dairies,” this statement is necessary to ensure that the intended regulation does not apply to existing dairies.

Target for Existing Dairies

Ag Council is also concerned about the aggressive targets for manure methane reduction for existing dairies. Reductions of 20 percent would be difficult to achieve under perfect circumstances, let alone under the imperfect situation that currently exists as it relates to dairy digester development in California. Significant economic barriers exist, as identified in the Draft Strategy, which have precluded large-scale adoption of dairy methane reduction strategies.

The dairy digester industry in California is still in its infancy and a number of factors have contributed to a low installation rate of methane digesters in California since the Compliance Offset Protocol Livestock Projects took effect in 2011. Digester projects are expensive with high equipment and installation costs. There are conflicting permitting and other regulatory requirements in the state, including air quality standards for Best Available Control Technologies (BACT) requirements for NOx that have prevented some existing methane digesters from upgrading engines or expanding digesters. The lack of, or difficulty accessing net metering in some areas of the state and with some energy providers has led to difficulties as well as variable technological and operational successes associated with methane digesters.

The offset credit is a critical investment tool and its removal will erode investor confidence in agricultural offsets in general and will impact the financial viability of these projects. Currently, compliance offset credits in the California market represent a significant potential portion of revenue from dairy digesters; therefore, removing this revenue stream before digesters are installed could undermine the SLCP plan and make installations more costly to dairy owners and to the state.

Coordination and Incentive Funding

While Ag Council remains concerned about the proposed targets, we are committed to working toward voluntary wide-scale adoption of methane reduction projects in California. A number of issues will need to be addressed by CARB, and other agencies must help facilitate wide-scale adoption and development in California.

Our observations include the following:

  • Extensive greenhouse gas reduction fund (GGRF) and other incentive funding will need to be provided to enhance the economics of these projects and encourage their adoption. The $500 million over 5 years proposed by CDFA represents a good start. There must be greater efficiency in how those funds are provided to project developers in order to expedite adoption and meet reasonable reduction targets.
  • Energy contracts, power purchase agreements (PPAs) and other off-take agreements for energy and transpiration fuel remain elusive and obstacles remain. Additional steps will need to be taken to ensure long-term contracts are available for the energy procured by these projects to enable project financing.
  • Interconnection barriers continue to limit project development for both electric energy and biomethane injection projects. ARB and the California Public Utility Commission (CPUC) will need to ensure Investor-Owned Utilities are prepared to work with, not against, project developers to efficiently and cost effectively interconnect and facilitate project development.

Additional Research

There still remain many data gaps in our efforts to understand and evaluate potential mitigation measures for SLCPs. More research is needed to fully determine the viability of these strategies in California and assess their associated costs and benefits.

  • Adoption of manure “scrape” systems may be an option for some dairies. Immediate research is necessary to quantify the GHG reduction potential of moving from flush to scrape systems and potential impacts to water quality and air quality for such conversions. If justified by research, a reduction protocol will need to be approved to facilitate and incentivize adoption. Appropriate incentive funding should also be provided once the cost and benefits are more fully understood.
  • Improved separation of manure solids may also provide quantifiable methane reduction. Immediate research to fully understand and estimate that potential will be needed. Furthermore, a reduction protocol should be approved if justified by research.
  • Additional research will also be necessary to fully monetize the benefits of manure composting and digesting. Fertilizer and amendment products and markets must be developed to realize this potential revenue stream and enhance projects’ economics.
  • Enteric emission reduction targets are also of concern to the dairy sector. The industry has made great strides over the past several decades to improve feeding and breeding to greatly reduce the GHG footprint of each gallon of milk produced in California. The dairy sector is already highly efficient and further reductions in enteric emissions will be difficult to achieve and will also require significant research.

Ag Council continues to recognize the importance of reducing greenhouse gases in California and elsewhere, and that reductions of SLCP provide an opportunity to “jump start” those efforts. We believe it is imperative to be engaged to ensure we remain the number one agricultural state while we continue to work to reduce our environmental footprint.

We appreciate your consideration and the opportunity to comment. Should you have any questions or need anything further from us, please feel contact Rachael O’Brien at (916) 443-4887 or via email at Rachael@agcouncil.org.

Respectfully,

Emily Rooney

President

Ag Council Comments on the 2030 Target Scoping Plan

October 16, 2015

The Honorable Mary D. Nichols, Chair
California Air Resources Board
1001 I Street
Sacramento CA 95814

RE: COMMENTS ON THE 2030 TARGET SCOPING PLAN

Dear Chair Nichols:

Agricultural Council of California (Ag Council) appreciates the opportunity to submit comments based on October 1, 2015, Joint-Agency discussion regarding the update of the 2030 Target Scoping Plan.

Ag Council is a member-supported organization advocating for more than 15,000 farmers across California, ranging from farmer-owned businesses to the world’s best-known brands. Ag Council works tirelessly to keep its members productive and competitive, so that agriculture can remain California’s number-one industry and members can continue to produce the highest quality food for the entire world.

We respectfully submit the following brief comments:

Economic Analysis

We appreciate the inclusion of an economic analysis section in the presentation and that the goal is to evaluate the economic impact of options for achieving the 2030 GHG target. Addressing the costs and benefits of climate change are important to the agricultural sector in the state.

As explained by the Air Resources Board, the Scoping Plan’s economic analysis provides us two models for determining the costs and benefits of emission-reducing technologies: the Energy and Environmental Economics pathway Model and the Regional Economic Models, Inc. Ag Council encourages the Air Resources Board to also evaluate the marginal costs of the strategies proposed and associated benefits.

We believe that state policy makers and regulators would benefit from an analysis of costs and benefits of the climate change program and associated regulations; and how alternative approaches would affect the California economy and our living environment. In particular, an analysis of whether the regulations have exacerbated or prevented emissions or economic leakage outside our borders is crucial.

It is promising that the advice offered five years ago by the 16-member Economic and Allocation Advisory Committee (EACC) appointed by Chairwoman Mary Nichols to assist ARB in its analysis of AB 32 economic impacts has the potential to be addressed with a new set of economic and technology advisors. EACC reported in 2010 that the economic analysis should focus on the interim years, not just the future. They also noted the limitations and suitability of the economic models that ARB has thus far utilized and advised that a full integration of the two models would provide a stronger assessment.

Agency Coordination

We appreciate the objective to coordinate across government agencies. The nature of California’s climate change policies necessitates that state agencies other than the Air Resources Board play a critical role in implementing AB 32 regulations and laws to help us achieve GHG emission reduction targets. Ag Council respectfully requests that ARB develop a more a transparent, publicly available accounting of how the funding to implement climate change policies is being coordinated among state agencies to prevent duplicative spending and project efforts. Having a section of your website devoted to presenting this information to the public in an easily accessed forum would be a huge benefit. We also ask that the Air Resources Board work closely with the California Department of Food and Agriculture and California Energy Commission to identify funding gaps and implement and fund the Healthy Soils Initiative and the Water Energy and Technology program.

In closing, it is critical that when looking at GHG reductions in specific sectors, that cost-effectiveness and technological feasibility be considered. There are very broad, overarching goals mentioned throughout the presentation in all focus areas, however, there is lack of detail of how those actual emissions will be achieved. We look forward to providing more in-depth comments as this process continues to move forward.

We appreciate your consideration and the opportunity to comment. Should you have any questions or need anything further from us, please feel contact Rachael O’Brien at (916) 443-4887 or via email at Rachael@agcouncil.org.

Respectfully,

Emily Rooney
President