Methane: dairy and livestock: pilot financial mechanism: Environmental Credit Insurance Program.

Existing law requires the State Air Resources Board to approve and begin implementing a comprehensive strategy to reduce emissions of short-lived climate pollutants in the state to achieve a reduction in methane by 40%, hydrofluorocarbon gases by 40%, and anthropogenic black carbon by 50% below 2013 levels by 2030, as specified. Existing law requires the state board, in consultation with the Department of Food and Agriculture, to adopt regulations to reduce methane emissions from livestock manure management operations and dairy manure management operations consistent with the strategy, as specified. The California Global Warming Solutions Act of 2006 establishes the state board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to approve a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020 and to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. Pursuant to the act, the state board has adopted the Low-Carbon Fuel Standard regulations. Existing law requires the state board to develop a pilot financial mechanism to reduce the economic uncertainty associated with the value of environmental credits, including specified credits from dairy-related projects producing low-carbon transportation fuels. Existing law requires the state board to make recommendations to the Legislature for expanding this mechanism to other sources of biogas. This bill instead would require the Treasurer, in consultation with the state board, to develop and implement no later than January 1, 2021, a pilot financial mechanism to reduce the economic uncertainty associated with the value of environmental credits, as specified. The bill would no longer require the state board to make recommendations to the Legislature for expanding this program to other sources of biogas and instead would authorize the Treasurer, in consultation with the state board, to expand this mechanism to other sources of very low carbon transportation fuel. This bill would establish the Environmental Credit Insurance Program, to be administered by the Treasurer in consultation with the state board, to increase the price certainty of the Low-Carbon Fuel Standard regulations credit market, as defined, for very low carbon transportation fuel or negative-carbon transportation fuel development projects, as defined, by providing payments to project applicants, as defined, for the difference between the strike price, as defined, and environmental credit price, as defined, if the environmental credit price drops below the contracted strike price. The bill would create the Environmental Credit Insurance Fund in the State Treasury with moneys in the fund to be allocated, upon appropriation by the Legislature, by the Treasurer for the purposes of the Environmental Credit Insurance Program.