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June 6, 2016

POLLUTION REDUCTION Proposal Is All Stick and No Carrot

At the time of this writing, Senate Bill 1383—a bill opposed by Western Growers that threatens to eliminate emissions reductions incentives and increase costs for farmers—is making its way through the Senate and is likely to be heard in the Assembly this summer.

SB 1383, by Senator Ricardo Lara (D – Bell Gardens), would require the California Air Resources Board (CARB) to approve and begin implementing a comprehensive strategy to reduce emissions of short-lived climate pollutants (SLCPs). Specifically, the bill aims to achieve a reduction in methane by 40 percent, hydrofluorocarbon gases by 40 percent and anthropogenic black carbon by 50 percent below 2013 levels by the year 2030.

This bill would have a direct impact on growers’ field and processing operations as it targets black carbon (from diesel emission) and hydrofluorocarbon gases (gases which are used in refrigeration and air conditioning). These emissions are being targeted because they are among the main greenhouse gases that have a relatively short lifetime in the atmosphere (a few days to a few decades) but have greater global warming potential than carbon dioxide.

SB 1383 comes on the heels of the climate change conference in Paris at which leaders from around the world reached an agreement to limit the rise in average global temperature. Everyone wants to protect the environment and ensure a sustainable future. However, the goals that are set must be achievable, efficient and cost-effective. WG staff is educating decision makers on the significant negative impacts this bill would have on growers and ag-related businesses statewide.


Implementing Mandates, Removing Incentives

SB 1383 overlooks the fact that voluntary incentive programs have been effective in encouraging business owners to implement sustainable practices and to rotate their equipment to cleaner burning engines. These mandates that require certain reduction targets be met by a given date do not take into account these large investments that industries—such as agriculture—have already made as early adopters of incentive programs.

Farming organizations and ag-related businesses are typically first in line when it comes to embracing policies that put farming practices on a more sustainable trajectory. Upgrades to equipment or technology are costly, but when growers have government support from incentives—such as grants and trade-in programs—the cost is easier to bear. With the mandates SB 1383 is proposing, those incentives are no longer available for use.

There is also the issue that these standards are uniformly applied across all industries. Marginal costs vary industry to industry; since SB 1383 is not tailored to any source and leaves absolutely no room for flexibility, it is unlikely that this mandate is the most cost-effective way to decrease emissions.


The Unintended Consequences of SB 1383

Command-and-control policy tools like mandates could have several drawbacks and result in unintended consequences. Innovative technologies play a significant role in solving the biggest global challenges such as environmental sustainability, food security and economic stability. There is no incentive to research new and creative ways to reduce emissions because “polluters” have very little choice about how to meet the mandates.

SB 1383 provides CARB with full, and largely unaccountable authority, to implement this SLCP reduction strategy. Many unanswered questions remain. What will happen to the investments that agriculture has already made to reduce black carbon emissions? Will those emissions reductions be incorporated or counted into the new goal set by SB 1383? What happens to the existing equipment inventory that farmers have recently purchased or traded-in as part of a grant program? Will they become stranded assets due to the fact that CARB will have to set much steeper SLCP goals? How do the proposed reduction goals in this bill relate to those in AB 32?

These are just a few important questions that remain unanswered. California agriculture plays a key role in our state’s economy and culture. This bill places an additional burden on daily agricultural operations and is based upon unrealistic emissions reductions expectations.