At the end of 2021, the California Legislative Analyst’s Office (LAO) released its annual report on the economic impacts and benefits of the state’s greenhouse gas (GHG) reduction targets. The assessment looked at the effects of major programs, within the agricultural sector, that are aimed at reducing emissions and sequestering carbon. The assessment also identified issues for the Legislature to consider for future policy and budget decisions.
The agricultural sector is ranked fifth in terms of greenhouse gas emissions, contributing 8% to the state’s total greenhouse gas emissions, predominantly from methane from livestock (70%) followed by fertilizers (16%). It is very important to understand where the state is headed in terms of climate policies and its impact on the state’s agricultural industry as a whole, which includes walnuts. Since establishing emissions reductions goals in 2006, the state has met limiting GHG emissions statewide to 1990 levels by 2020. However, in 2016, legislation (SB 32, Pavley) extended the limit to fall 40% below 1990 levels by 2030.
Because of the additional impact of Climate-Smart Agriculture and over $1.1 billion in funding included in the Budget Act of 2021, and more to come in 2022 in related budget categories, following where the state’s dollars are going may be a good indication of where agriculture is headed.
Through 2020-2021, the state provided a total of $383 million to support projects from these programs, and the California Air Resources Board (CARB) estimates that the projects funded to date provide a total of 2.5 MMTCO2e benefits annually. (The 2021-2022 budget included an additional $340 million over two years for these programs.) These programs will be important for the impacted industries, including walnuts with the Healthy Soils and State Water Efficiency and Enhancement Programs, to be involved in for further reduction of GHG emissions and optimizing opportunities for sequestering carbon. There may be other potential in the carbon markets for producers looking to start receiving incentives and benefits for their enhanced Climate-Smart Agriculture practices.
Overarching Takeaways from Review of Major Agricultural Programs and Proposed Next Steps
Overall, the LAO finds that each of the four programs assessed in this report have significant potential to provide GHG benefits as intended. However, they also find that—for varying reasons—the magnitude of GHG benefits estimated for each program could be overstated. To the extent the Legislature continues to fund these programs, the LAO recommends that state departments be directed to conduct additional evaluation and research to better assess the GHG benefits. Improved information could then be used to help the Legislature target limited state funding to cost effectively achieve its policy goals—that is, to maximize GHG and methane reductions at the lowest cost possible.
Additional evaluation and research activities likely would result in additional state costs. However, the LAO finds that in many cases, these costs would be modest compared to the amount of total state spending on these programs and could be covered within departments’ existing research programs or future program augmentations. The additional engagement and enrollment in these programs from the agricultural industry is important for continued GHG and methane reductions. All of this will be important to track and follow for the walnut industry, as key policies, programs and incentives mentioned above and being developed in the future will play a big role in the future of Climate-Smart Agriculture, California agriculture and California walnuts.
To view the complete LAO climate policy & Ag report, visit: Assessing California’s Climate Policies—Agriculture.
