California may be a climate leader, but it could be a century behind on its carbon goals: study

California just got sobering news that despite its nation-leading renewables build, it may be a century late in achieving its ambitious climate goals.

The shift to renewables allowed California to meet its 2020 mandate to reduce its greenhouse gas (GHG) emissions to 1990 levels four years early, according to an Oct. 8 Next 10 report. But the state's GHG reduction rate must be three times faster to get to the next target of 40% below 1990 levels by 2030, Next 10 found.

At California's GHG reduction rate in 2017, the most recent year detailed by the California Air Resources Board (CARB), it would reach its 2030 goal in 2061 and its 2050 goal of emitting 80% below 1990 levels in 2157, "a 31-year and a 107-year delay."

But those projections may miss what can happen in the next decade if California can turn its linear work on reducing GHGs into exponential reductions, stakeholders told Utility Dive. That big "if" will require unprecedented work in so-far unresponsive sectors of the economy, they added.

"The optimism in this sobering report is that California has made itself a climate leader with policies and regulations and with entrepreneurs rising to the challenge."

Noel Perry

Founder, Next 10

Power sector emissions reductions attributable to renewable energy additions masked growth in California's transportation, building and industrial sectors, the report found. Economic growth drove transportation emissions to a record high in 2017. And wildfire emissions, which were higher than commercial, residential or agriculture sector GHGs in 2017, were worse in 2018.

"The optimism in this sobering report is that California has made itself a climate leader with policies and regulations and with entrepreneurs rising to the challenge," Next 10 Founder Noel Perry told Utility Dive. "New policies and regulations can create new solutions."

Next 10 findings

Before 2016, CARB numbers showed California would need to reduce its GHGs 3.92% per year to achieve its 2030 goal. But the state only reduced its emissions 1.15% between 2016 and 2017, so now it must cut GHGs 4.51% per year to achieve that goal, Next 10 found.

A major factor in the lower reduction rate was the state's economic growth. Many argued adding variable renewables would slow economic growth, but not in California, where gross domestic product per capita grew 3.1% in 2017, renewables made up over 25% of electric power and power sector emissions fell 1.8%.

As part of that economic growth, in 2017, a record 80.6 out of every 100 Californians owned a vehicle. And "super commutes" of 90 minutes or more increased as vehicle miles traveled (VMT) grew 0.5% from 2016 to 2017. As a result, transportation emissions hit 41.1%, up from 40.4%.

"With the 2020 targets met, there was no reason to decarbonize faster. The CARB plan was designed to make steeper progress between 2020 and 2030."

Mark Spech

Climate and Energy Program Analyst, Union of Concerned Scientists

"The transportation and industrial sectors represent the biggest challenges," Adam Fowler, director of research for Beacon Economics and Next 10 report lead author, told Utility Dive. Since 2000, GHGs have fallen 4.4% in the industrial sector and 4.9% in the transportation sector, "significantly short" of the annual 4.51% reduction needed economy-wide.

California's electric vehicle (EV) use increased 37% in 2017, and zero emissions vehicles (ZEVs) reached 1.5% of registered on-road fleet in 2018, according to the report. But gas-powered light-duty pickup trucks, mini-vans and SUVs made up 39.3% of new vehicle registrations in 2017, and that increased to 57.3% in 2018.

Total energy consumption and per capita also increased in California from 2015 to 2016, and from 2016 to 2017, Fowler said. Driven by "plug-in electronic devices and EVs," California's "total electricity consumption in 2017 reached highs not seen since 2008 at the start of the Great Recession."

But these numbers are not the whole story, policymakers and academics said.

Is Next 10 right?

With the power sector ahead of its 33% renewables by 2030 goal, California is "on track to meet its clean energy goals," California Energy Commission spokesperson Edward Ortiz told Utility Dive in an email. He did not address the industrial and transportation sector concerns raised by Next 10.

Next 10's approach significantly misrepresents the state's accomplishments, Union of Concerned Scientists (UCS) climate and energy program analyst Mark Spech agreed. "With the 2020 targets met, there was no reason to decarbonize faster. The CARB plan was designed to make steeper progress between 2020 and 2030."

CARB's 2017 Scoping Plan defines the pathway for California's emissions reductions. It acknowledges that California's goal is "ambitious," CARB Climate Change Programs spokesperson Dave Clegern told Utility Dive in an email. But the plan provides "a cost-effective, technologically feasible path" to reductions "much like those called for in the Next 10 study" that will "squeeze the carbon out of the state's economy."

"Early reductions are often easier, so there is logic to not assuming reductions will accelerate. But California accelerated to get to the 2020 goals early and can again. Either way, the important takeaway is that we're not on schedule and we need to redouble our efforts."

Dan Kammen

Professor of Energy, U.C. Berkeley

He called wildfire emissions "part of the natural carbon cycle" that must be distinguished from human-caused emissions.

Wildfire emissions are part of the carbon cycle but cause temporary emissions spikes, Stanford University Professor of Civil and Environmental Engineering Mark Jacobson, director of the university's Atmosphere/Energy program, told Utility Dive. They can be addressed with increased efforts in other sectors and by replanting trees.

Next 10's analysis is "conservative, but not wrong," U.C. Berkeley Professor of Energy Dan Kammen, Director of its Renewable and Appropriate Energy Laboratory, told Utility Dive.

Three areas offer important challenges and opportunities, stakeholders said.

Where the solutions are

Exponentially accelerating California emissions reductions will require new solutions in sectors not cutting carbon quickly enough. Some argue the state's cap-and-trade plan will drive those reductions. Others said innovative policy solutions are the key.

Cap-and-trade

The cap-and-trade program caps emissions allowed from electric power plants, industrial plants and distributors of fossil fuels at 3% per year through 2020, according to the Center for Climate and Energy Solutions. Facilities that exceed those caps must purchase allowances from a CARB-administered market. Proceeds from allowance purchases have directed $5 billion to programs that reduce GHGs via energy efficiency, ZEV, housing and land use programs, CARB reported in its 2017 scoping plan.

In 2021, the cap on 85% of emissions in California's economy, will begin tightening by 4% annually through the cap-and-trade program, CARB's Clegern said. "In addition, the Low Carbon Fuel Standard will require carbon intensities to decline about 1.25% to 1.5% annually [for vehicle emissions], up from less than 1% through the 2020 period."

The cap-and-trade program "won't deliver," Stanford Law School lecturer Danny Cullenward, who is also policy director for think tank Near Zero and a research associate with the Carnegie Institution for Science, told Utility Dive in an email.

CARB's Scoping Plan calls for cap-and-trade to do "nearly half the work" to achieve the 2030 goals, but it has too many allowances and offsets to do so, he said. "Pretending cap-and-trade will solve the problem has delayed a tough conversation the data show is inevitable, as Next 10 points out. The sooner that conversation happens, the better."

"The original AB 32 design called for 80% of GHG reductions to come from other policies, and the cap-and-trade market mechanisms were for things that policy missed," Center for Energy Efficiency and Renewable Technologies (CEERT) Executive Director V. John White told Utility Dive. "That is reversed in the CARB Scoping Plan."

California now needs "a climate implementation plan," modeled on CARB's air pollution implementation plan, that assimilates all relevant regulations and proposes new policies to achieve those goals, White said. It could add "direct emission reduction measures" for each economic sector to the market mechanisms, and monitor incremental progress.

Transportation

In transportation, "the big obvious thing is coming," UC Berkeley's Kammen said "It will not be easy, but gasoline-powered cars have to be and are being phased out."

"California has been implementing policies to reduce transportation emissions," Union of Concerned Scientists (UCS) Transportation Program Research Director Don Anair said. "The policies in place were designed to have an impact by 2025. It will take time, like turning a ship, and California is starting to make that turn."

"The bad news is that progress on industrial emissions is extremely difficult ...The good news is that there are things to do that are likely to prove cheap, effective, impactful and low-risk."

Julio Friedmann

Senior Research Scholar, Columbia University Center on Global Energy Policy

Transportation electrification must be accelerated because over half the state's GHGs came from the transportation sector last year, Kammen said. Policy fixes could include a revenue neutral "fee-bate" that imposes fees on internal combustion engine vehicle purchases to pay for rebates to ZEV purchasers.

Incentives or requirements for manufacturers to produce zero emission heavy duty vehicles and incentives for truck fleet operators to buy them are also needed, Anair added. "That's a huge opportunity California is missing. It is critical the ambition of standards match what is needed."

Industrial

"The bad news is that progress on industrial emissions is extremely difficult," Columbia University Center on Global Energy Policy Senior Research Scholar Julio Friedmann told the U.S. House of Representatives Energy and Commerce Committee Sept. 18. "The good news is that there are things to do that are likely to prove cheap, effective, impactful and low-risk."

There are few alternatives to burning fossil fuels to achieve the temperatures of 300°C and even higher needed to manufacture staples of the economy like cement, steel and plastics, said a paper released by Friedmann Oct. 7. Electricity generated by abundant zero-marginal-cost but variable renewables will not substitute because the processes "require continuous operation or operation on demand."

The cheapest way to get high heat levels and limit emissions today is extracting hydrogen from methane and pairing it with "carbon capture, use, and storage (CCUS)", Friedmann reported. It would add 10% to 50% to the cost of industrial processes, but can create a pathway to extracting hydrogen from water with renewables-generated electricity and eventually making it economically practical to use in manufacturing, transportation, and other sectors once wind and solar prices drop.

The Intergovernmental Panel on Climate Change and others have concluded that CCUS "is essential to achieve important climate targets, including 2°C, let alone 1.5°," Friedman told the committee.

California will have to face up to CCUS, "not to prolong the use of fossil fuels but to recycle the carbon usefully," CEERT's White agreed. "It will be necessary, and sooner rather than later. California cannot dismiss any solutions because it will need to do everything."

The industrial sector's roughly 25% of California GHGs can be addressed with policies like the Buy Clean California Act that drives demand for innovative solutions, ClimateWorks Foundation Industry Strategist Rebecca Dell told Utility Dive. "Any company from any state can get a part of that very big California construction supply market by meeting the Act's limit on emissions content."

Policy and incentives can also drive commercially available options like cement with less clinker and steel and plastic with more recycled materials to deliver a 20% to 30% GHG reduction in the near term, Dell added.

"Setting targets and doing press releases is the easy part, and recognizing that the state is falling short and making course corrections will not be easy," CEERT's White said. "But Next 10 has been a cheerleader for the benefits of the energy transition, so this is a very significant message that things are not going well."