This page informs interested parties about the overall statewide diversion rate calculation for 2005. This information was first released at the August 15, 2006, Board meeting.
2005 Estimated Diversion Rate: 52 Percent
California's statewide diversion rate estimate for 2005 is 52 percent, 4 percentage points higher than the 2004 estimate. Based on current estimates, California generated over 88 million tons, disposing about 42 million and diverting over 46 million tons. Since waste is generated by a wide variety of activities, estimating and understanding diversion rates can be challenging. A change in methodology makes it particularly difficult to compare the 2005 statewide diversion rate to previous years' diversion rates.
Each year the Board's Diversion, Planning and Local Assistance Division (DPLA) reports on statewide progress toward the diversion goals of the Integrated Waste Management Act of 1989. Prior to 1997 the statewide diversion rate estimate was typically available in late spring due to the Disposal Reporting System (DRS) schedule and availability of information provided by the State Board of Equalization (BOE). Starting in 1997, staff made efforts to ensure earlier, more uniform diversion rate estimates. The statewide diversion rate estimates are now based on the Federal Fiscal Year (for example, October 1, 2004 through September 30, 2005). This change provides an earlier diversion rate estimate.
Adjusted Generation Estimate
The Board-approved Adjustment Method (AM) uses changes in population, employment, and inflation-adjusted taxable sales to estimate that 88.2 million tons were generated in 2005. This is 10.3 million tons higher than the 2004 estimated statewide generation. This significant increase in estimated generation is partly due to a change in calculation methodology that uses Taxable Sales Deflator Index (TSDI) instead of Consumer Price Index (CPI) to adjust taxable sales growth for inflation. This change is based on input from the stakeholder working group and September 2005 Board direction. According to BOE, TSDI is a more accurate indicator of taxable sales inflation. TSDI measures inflation at a slower rate than CPI, causing a higher growth rate in real taxable sales. This higher growth rate causes estimated generation, and the resulting diversion rate, to be higher than it would be if CPI was used. Therefore, the 2005 generation estimate is not comparable to previous years' estimates. (More about TSDI)
Disposal Up 2.7 Percent
For 2005, disposal amounted to 42.2 million tons, about 1.1 million tons or 2.7 percent more than in 2004. This is a slightly higher increase in disposal tons than the nearly 1.0 million ton increase that occurred between 2003 and 2004.
California's 2005 construction activity growth, and the challenges associated with diverting construction and demolition (C&D) debris, may have significantly contributed to this increase in disposal. Staff analysis shows that there is a relationship between disposal tonnage and construction activity. The California construction industry employment sector showed the largest percent change in employment during 2005. While overall industry employment increased about 1.6 percent, construction employment increased about 6.5 percent (Figure 1). Since 1999, construction employment has increased about 32.7 percent, while overall employment has increased by only about 5.6 percent (Figure 2). Residential permits, another major construction indicator, increased by 5.3 percent in 2005. Since 1999, residential permits have increased over 58 percent (Figure 3).
In addition, the disposal impact of a 1.8 percent population increase for 2005 should not be overlooked.
Diversion at 52 Percent
An estimated 46.2 million tons were diverted in 2005. In response to the increase in construction activity, the Board and jurisdictions have significantly increased efforts to divert construction materials. New construction and demolition diversion programs have been implemented and many more are in the planning stage. More green waste and single-stream recyclables diversion programs may also have contributed to this increase in diversion. The change in methodology to now use TSDI also impacted the increase in estimated diversion, because diversion is directly linked to estimated generation.
Based on recommendations from the stakeholder working group and Board direction in September 2005, staff continues to research whether the AM can be improved. Staff continues to work with faculty from the Economics Department at California State University, Sacramento, to determine if there are other factors, such as building permit data, that can be included in the AM, or if the AM formula can be changed to more accurately estimate generation.
The purpose of AB 939 is to conserve resources and extend landfill capacity, not penalize jurisdictions for increases in population or economic growth. Thus, when population and the economy grow, jurisdictions will not automatically fail to meet the diversion goals. The impacts of demographic and economic changes on the waste stream must be considered when calculating diversion rates. By incorporating these demographic factors, the AM allows comparisons between years regardless of the changes in population and economics.
The first step in performing the calculation is to determine the 2005 statewide waste generation tonnage. Generation is the total amount of waste disposed and diverted. To arrive at this number, we estimate the statewide base year (2000) generation tonnage, taking into account new jurisdiction base years. Next, we estimate 2005 generation using the AM, which uses change in population, employment, and inflation-adjusted taxable sales since the base year. 2005 estimated statewide generation is approximately 88.2 million tons.
The next step is to determine 2005 statewide disposal. Disposal is the total amount of waste that is landfilled, exported out of state, and transformed. However, since statewide transformation is less than 10 percent of total estimated generation, transformation was excluded from total disposal and, thus, counted as diversion. The Disposal Reporting System (DRS) tracks the amount of waste disposed by each jurisdiction in the state. However, because DRS data has not been received from some counties for the 3rd quarter of 2005, the BOE's Integrated Waste Management Fee data is used to fill the gaps. After combining the disposal tonnage from these data sources, 2005 total estimated disposal is 42.0 million tons. Dividing this number by statewide generation, we arrive at a disposal rate of 48 percent. To determine the 2005 diversion rate, we subtract disposal (48 percent) from generation (100 percent) to get 52 percent. Approximately 46.2 million tons were diverted from landfills in 2005.
Return to current year diversion rates memo to view previous years' statewide diversion rates.