This page explains the overall statewide diversion rate calculation for 2006. It was first released at the June 12, 2007, Board meeting.
2006 Estimated Diversion Rate: 54 Percent
California's statewide diversion rate estimate for 2006 is 54 percent, 2 percentage points higher than the estimate for 2005. For 2006, California generated over 92.2 million tons, disposed about 42.2 million tons and diverted over 50.1 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 2005 and 2006 statewide diversion rates not directly comparable to prior year diversion rate estimates.
Each year the Board's Sustainability Program reports on statewide progress toward diversion goals of the Integrated Waste Management Act of 1989. Starting in 1997, these statewide diversion rate estimates cover the federal fiscal year, e.g., October 1, 2005 through September 30, 2006. This change provides an earlier diversion rate estimate.
Adjusted Generation Estimate
The Board-approved Adjustment Method (AM) uses change in population, employment, and inflation-adjusted taxable sales to estimate that 92.2 million tons were generated in 2006. This is 4 million tons higher than the Board's statewide generation estimate for 2005. Starting in 2005, the Board adopted a new calculation methodology that uses a Taxable Sales Deflator Index (TSDI) instead of the Consumer Price Index (CPI) to adjust taxable sales growth for inflation. This change is based on input from a stakeholder working group and September 2005 Board direction. According to the State Board of Equalization (BOE), TSDI is a more accurate indicator of taxable sales inflation. TSDI measures inflation at a slower rate than CPI, reflecting a more accurate and higher growth rate in real taxable sales. This higher, more accurate growth rate means estimated generation, and the resulting diversion rate, are higher than they would be if CPI was used. Therefore, the 2005 and 2006 generation estimates are not directly comparable to prior year estimates. (More about TSDI)
Disposal Up 0.5 Percent
For 2006, disposal amounted to 42.2 million tons, about 0.1 million tons or 0.5 percent more than in 2005. This increase in disposal tons is less than the nearly 1.1 million tons, or 2.7 percent increase, that occurred in 2005.
California's 2006 residential construction activity decline may have significantly contributed to this slower disposal growth rate. Staff analysis shows there is a relationship between disposal tonnage and construction activity. The California construction industry employment sector had the second highest percent change in employment during 2006. While overall, or total, employment increased about 1.9 percent, construction employment increased about 5.5 percent (Figure 1). Since 2000, construction employment has increased about 30.1 percent, while overall employment has increased about 4.1 percent (Figure 1). The value of all California construction authorized by building permits for 2006 had a 9 percent decline since 2005, but a 27 percent increase since 2000 (Figure 2). At the same time, continued growth in non-residential permit valuation offset some of the decline in residential permit valuation (Figure 2). New housing units permitted, another major construction indicator, decreased by nearly 22 percent since 2005, but increased 10 percent since 2006 (Figure 3).
In addition, the disposal impact of a 1.1 percent population increase for 2006 should not be overlooked. However, this population increase is lower than a 1.8 percent increase for 2005.
Diversion at 54 Percent
An estimated 50.1 million tons were diverted in 2006. In response to increased construction activity, the Board and jurisdictions have significantly increased efforts to divert construction materials. New construction and demolition diversion programs have been implemented and 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 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 change 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 change in population and economics.
The first step in performing the calculation is to determine the 2006 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 2006 generation using the AM, which uses change in population, employment, and inflation-adjusted taxable sales since the base year. The estimated statewide generation for 2006 is approximately 92.2 million tons.
The next step is to determine 2006 statewide disposal tonnage. 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, due to new DRS requirements effective January 1, 2006, some data have not been received from some counties. BOE's Integrated Waste Management Fee data are used to fill these gaps. After combining the disposal tonnage from these two data sources, 2006 total estimated disposal is 42.2 million tons. Dividing this number by statewide generation, we arrive at a disposal rate of 46 percent. To determine the 2006 diversion rate, we subtract disposal (46 percent) from generation (100 percent) to get 54 percent. Approximately 50.1 million tons were diverted from landfills in 2006.