Dive Brief:

• California is not on track to meet its 2030 economy-wide decarbonization milestones based on its current policy commitments, according to new modeling from Energy Innovation. The analysis estimates the state is on track to produce 307 million metric tons of emissions in 2030 – nearly 20% over target.
• The study emphasized the importance of electrifying energy demand in the state, noting that, especially in the context of the ongoing Russian war against Ukraine, electrification could reduce California’s exposure to volatile global oil markets.
• “The key takeaway is that California is leaving beneficial, earlier action on the table,” said Chris Busch, research director with Energy Innovation. “We don’t have any time to waste on climate, so there are opportunities in every sector that we find for beneficial, accelerated decarbonization,” he added.

Dive Insight:

California passed legislation in 2016 that set the state on a path to reducing economy-wide emissions 40% below 1990 levels by 2030. Two years later, the then governor issued an executive order aiming for carbon neutrality by 2045. California’s emissions will need to fall below 260 MMT to meet the target in eight years, according to Energy Innovation’s report — this translates to more than tripling its historical decarbonization rate. 

Another impetus for this analysis is to provide insights to the California Air Resources Board’s ongoing 2022 scoping plan process. The agency’s scoping plan — first developed in 2008, and updated at least every five years — outlines the state’s approach to decarbonization. The agency is completing its 2022 update, which focuses on the 2030 emissions reduction target as well as achieving carbon neutrality by 2045. The agency’s draft plan, however, has been met with criticism from some quarters, including environmentalists and climate experts, for, among other things, not being aggressive enough.

Energy Innovation’s report outlines multiple near-term policy measures that California should prioritize based on its latest analysis. It recommends that the state aim to have all new cars and light-duty truck sales be zero-emission by 2030, which the group estimated would reduce emissions by 38 MMT per year. It also recommended that California aim for 100% electrification of new appliances by 2030, which could reduce emissions by another 19 MMT annually. 

In addition, the report recommends that California boost its clean energy standard to reach 76% renewables and 92% zero-emission electricity in 2030. Legislation passed in 2018 adopted a state target of 60% renewable resources by the end of the decade, and earlier this year, the California Public Utilities Commission set a 35 MMT greenhouse gas emission planning target for the electric sector by 2032, which would result in 73% renewables by 2032.

“[E]ven modest increases in the clean energy standards deliver supercharged emissions reductions because of growing use of electricity use from economy-wide electrification,” according to the report.

At the same time, it will be very important for policy-makers to ensure that electricity remains affordable in the future, leading to the report’s next recommendation — don’t use electricity rates to pay for roughly $38.9 billion in pending wildfire-related costs.

Keeping electricity rates affordable will be a key part of electrifying more end uses, according to Busch. 

“And then there’s also just equity concerns — since energy is a... fundamental essential of life, and energy costs tend to be a higher proportion of budgets for lower-income households,” he added.

California is trying to electrify more of its energy demand at the same that that the state is also pushing for more renewables, which means demand flexibility is going to be a key part of the state’s strategy, according to Pierre Delforge, director of clean buildings with the Natural Resources Defense Council’s climate and clean energy program. 

“It’s both a question of grid reliability, cost and also how to achieve 100% renewable goals when the renewable energy is not necessarily available when we need it,” he said, adding, “It’s about having the demand match the availability of the renewable energy — so either way, demand flexibility is going to be critical.”

A key challenge in building that demand flexibility will be scaling it up.

“The traditional concept of demand response has been a few large customers a few times of the year, and this is not what we’re talking about here … we’re really talking about pretty much all customers everyday,” and making sure that every appliance that is sold and installed is flexible and can respond by default to time-of-use rates or grid signals, he said.

Energy Innovation’s report is just the latest in a line of scientific evidence that shows CARB should revise their proposed scoping plan, said Connie Cho, associate attorney with Communities for a Better Environment. 

“I think across the board, we need to see more aggressive [electrification targets] to be able to meet the scale of the climate crisis,” Cho said.