In the past decade, California has saved tens of billions of dollars and created tens of thousands of jobs by taking a smart approach to energy. As one of the world’s ten largest economies, California’s approach provides a living demonstration, at a near-national scale, of an integrated, comprehensive approach to climate change.
As President Obama and other world leaders consider ways to effectively tackle carbon pollution while growing their economies, what lessons can be learned from the California experiment?
Here is a sampling of what’s on the agenda in California:
Global Warming Solutions Act (AB32)
California has spent over 30 years implementing policies for cleaner fuels and vehicles. These efforts have now been expanded to cutting carbon and improving building performance as key strategies in combating climate change.
Beginning in 2006 with the passage of AB32, the state spent several years engaging scientists, energy experts, industry stakeholders and community leaders in working groups and pilot programs to develop a long-term strategic plan for reducing greenhouse gases across multiple sectors in a way that would be most cost-effective across the economy as a whole.
This has led to signature programs like the state’s Renewable Energy Portfolio Standard (RPS) and Cap-and-Trade program. But it has also meant cleaning up some of the nation’s largest ports, designing the nation’s first high-speed rail system, and steadily improving building performance standards. California has also been focusing on ways to reduce pollution and improve efficiency in water, waste, agriculture, and transportation systems as well.
Renewable Portfolio Standard (RPS)
The RPS is one of AB32’s largest emission-reduction strategies, requiring that 33% of electricity sold in California come from clean energy sources by 2030. The state is currently on target to meet those goals, and the RPS has led to significant increases in rooftop solar, making California the national leader in both solar capacity and solar job creation. According to the most recent National Solar Jobs Census, over 43,000 people now work in California’s rooftop solar industry - more than work at the state’s three largest utilities combined. This demonstrates that a distributed generation approach with hard targets can dramatically increase adoption of renewables, while avoiding the costs of building new power plants.
Decades of state efficiency programs beginning in the 1980’s have saved California over $50 billion dollars. In 2003, as part of the state’s first Energy Action Plan, California established a clear “loading order” for energy resources to build on that experience. The loading order prioritizes energy efficiency first; followed by renewables and distributed generation; with clean, efficient fossil-fuels as the last priority. California now has a strategic plan to promote energy efficiency in buildings and appliances by using codes and standards that ramp up energy performance requirements every three years. The new rules saved California an estimated $23 billion over just the last five years.
Zero Net Energy Buildings
To meet the state’s aggressive efficiency targets, California is requiring all new residential construction to be zero net energy by 2020, and all commercial buildings by 2030. New buildings in 2014 will be 25% more efficient than those built just three years ago. In 2017, building efficiency will increase again, and by 2020 every building will produce as much energy as it needs from the grid on an annual basis.
Solar Ready Buildings
The next big step on the way to Net Zero comes on January 1, 2014 when California will require that all newly constructed buildings to be “solar ready”. These means every new building must reserve sunny roof space; and provide electrical and/or plumbing conduit to make installing future solar easier and more affordable.
Low-Income communities in California are an especially important focus in the effort to address climate change. Lower income Californians spend a higher percentage of their monthly income on energy; money that typically goes out of their communities, and harms the planet. Low-Income communities are also the ones most impacted by air pollution from power plants, refineries and freeways.
California directly promotes energy saving by requiring higher sustainability standards for all affordable housing that receives public dollars. To be eligible for tax credits, affordable housing projects in California have to be LEED Gold or equivalent, and perform 25% better than the state building code – already the most aggressive green building code in the country. The California Solar Initiative Thermal program, also gives higher incentives for solar water heating to qualified affordable housing facilities.
Cap and Dividend
California’s new Cap-and-Trade program held its first successful auctions, raising nearly $400 million dollars in 2013, with carbon allowances trading near $14 a ton. The CA Public Utilities Commission has approved a plan to return 85% of these cap-and-trade revenues to ratepayers in a biennial “climate dividend.” The CPUC estimates this will provide billions of dollars a year in ratepayer rebates through 2020, though it remains to be seen whether the fledgling cap-and-trade program will grow into the billion dollar annual market supporters have projected.
So What Has California Learned?
With a successful track record creating cleaner fuels, better buildings, and boosting renewables, California is well on its way to reducing its own carbon footprint. But when it comes to global warming, the real question is what can California do to help the rest of the world? It’s hard to ask countries in the developing world to reduce their GHG’s if we haven’t already proven these strategies will work. California has led by example, and offers several strategic pathways for others to follow.
Not everything that works in California will work for the rest of the world. And the state still faces significant challenges in this ongoing experiment. But much of what has been tried and tested in California could well serve countries around the world.