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California's Climate Plan: A Global Model Despite NEM 3.0 being Settled

An ambitious new climate strategy is being implemented in California with the goal of eradicating the state's footprint in terms of greenhouse gas emissions by the year 2045 and, in the process, reducing emissions in areas far beyond its borders. The plan calls for significant changes to be made in areas such as business, energy, and transportation, in addition to adjustments to social institutions and individual behaviour.

These changes will not be simple to implement. During the two years that were spent constructing the plan, a multitude of obstacles and tensions were revealed. Some of them included environmental justice, affordability, and local rule.

(In December, and following a standoff that was similarly stressful and hard between proponents of solar energy and investor-owned utilities, the state's public utility commission passed Net Energy Metering 3.0 with a unanimous vote (NEM 3.0). Beginning on April 15th, NEM 3.0 will implement a reduction of 75% in payments for surplus solar production that is supplied to the grid from rooftop solar arrays.

In another place, the San Francisco Fire Commission had banned the installation of batteries in private residences that had a capacity of more than 20 kilowatt-hours (kWh), which severely restricted the capacity to store solar energy generated by rooftop solar panels for use during periods when the sun was not shining. More generally speaking, local opposition to new transmission lines, large-scale solar and wind installations, substations for truck charging, and oil refinery conversions to produce renewable diesel will all slow down the shift.

As a longtime board member of the California Air Resources Board, the state body that controls air pollution and climate management, I had a front-row seat during the preparation and vetting of the plan. In other words, I had the best seat in the house. And the person who has contributed the most to this piece, Rajinder Sahota, is the deputy executive officer of the board. He is the one who is in charge of preparing the plan and avoiding political minefields.

We have reason to believe that California is capable of achieving its goals and, in so so, illuminating the path forward for the rest of the world. The vast majority of the necessary policies have already been put into place.

California has a presence around the world

What happens in California has an impact that extends well beyond its borders.

The economy of California is getting near to being the fourth-largest in the world, and the state has a long history of implementing environmental rules that are replicated across the United States and the world. The state of California has one of the largest carbon cap-and-trade programs, the most stringent requirements for renewable electricity, the most aggressive zero-emission requirements in the world for automobiles, trucks, and buses, the most stringent requirements for low-carbon fuel, and the most stringent requirements for low-carbon fuel.

Because of quirks in the national law governing air pollution, several other states in the United States have adopted many of California's restrictions and programs in order to get a head start on the national government's policies. It is up to individual states to decide whether they will adhere to the federal car emissions requirements or California's more stringent regulations. There is not a third choice available. California is now being followed by a growing number of other states.

Therefore, despite the fact that California is responsible for less than 1% of global greenhouse gas emissions, if it establishes a high standard, the state's numerous breakthroughs in the areas of behavior, institutions, and technology will most likely spread and be transformative.

The template that California has provided

The new Scoping Plan spells out in substantial detail how the state of California plans to cut emissions of greenhouse gases to levels that are 48% lower than those in 1990 by the year 2030, and then achieve carbon neutrality by the year 2045.

It asks for a reduction of 86 percentage points in the overall consumption of fossil fuels and a reduction of 94 percentage points in the usage of petroleum between the years 2022 and 2045. Overall, it would result in a reduction of greenhouse gas emissions of 85 percent by the year 2045 in comparison to the levels in 1990. The remaining 15% reduction would come through carbon sequestration below ground or in forests, vegetation, and soils. This would be accomplished by absorbing carbon from the air and from plants that burn fossil fuels.

Emissions of greenhouse gases in California broken down by industry

The transportation sector is the state's primary contributor to greenhouse gas emissions. Electric vehicles and the electrification of buildings have the potential to drastically reduce emissions as the state develops its usage of renewable energy.

The plan calls for a 37-fold increase in the number of on-road zero-emission vehicles, a sixfold increase in the number of electrical appliances in residences, a fourfold increase in the installed capacity of wind and solar generation, and a doubling of total electricity generation to power it all. These changes are necessary in order to achieve the goals that have been set. In addition to this, it recommends increasing the use of hydrogen power and making changes to agricultural practices and forest management in order to cut down on forest fires, store more carbon dioxide, and lower the demand for fertilizer.

This is a tremendous project, and it requires a massive transformation of a large number of different sectors and activities.

The most prolific polluter in the Golden State

The transportation sector is responsible for approximately half of the state's greenhouse gas emissions, which also includes emissions from upstream oil refineries. At this point, the next step may be the one with the least amount of uncertainty. The state has already passed legislation that require practically all new automobiles, trucks, and buses to have zero emissions. These regulations will take effect for new transit buses in the year 2029, while the majority of truck sales and all light-duty vehicle sales will take place in the year 2035.

In addition, under California's Low Carbon Fuel Standard, oil firms are obligated to make gradual reductions in the amount of carbon dioxide (CO2) contained in transportation fuels. This legislation intends to ensure that low-carbon biofuels will be available to meet the demand for liquid fuels to be used in legacy vehicles that will still be on the road after the year 2045.

However, if there is enough pushback, regulations may be altered or even scrapped entirely. It is possible that the state will be forced to slow down its requirements for zero-emission vehicles if the cost of batteries does not continue their downward trend, if electric utilities and others are slow to provide charging infrastructure, and if local opposition prevents new charging sites and grid upgrades from being implemented.

Alterations in people's behaviors are also essential to the approach. For instance, it requires a reduction of 25 percent in the number of vehicle miles traveled in 2030 compared to 2019, which is a year with far poorer prospects. The only strategies that have a good chance of significantly reducing vehicle use are high fees for road use and parking, which is a change that very few politicians or voters in the United States would support, and a massive increase in the number of shared-ride automated vehicles, which is not likely to scale up for at least another 10 years. Additional fees for driving and parking raise worries about whether or not they will be affordable for commuters with lower incomes.

Electricity, as well as the process of electrifying buildings

Using electricity that is produced by renewable energy sources is the key to reducing emissions in practically every industry.

In order to electrify the vast majority of things, not only will the majority of the state's natural gas power plants need to be replaced, but the state will also need to increase the amount of total electricity production; specifically, it will need to double the amount of total generation and quadruple the amount of renewable generation in just 22 years.

This amount of development and investment is mind-boggling, and it is the single most essential change for attaining net zero, as the capacity of electric vehicles and appliances to count as having zero emissions depends on the availability of renewable electricity.

In California, the electrification of buildings is in its early stages, with requirements in place for new homes to have rooftop solar, as well as incentives and regulations adopted to replace natural gas use with heat pumps and electric appliances. In other words, the state is well on its way to becoming a leader in the electrification of buildings.

Accelerating the creation of renewable electricity, primarily through the use of wind and solar power at utility scale, is the greatest and most essential issue. The state has passed legislation that require all of the state's electricity to produce zero emissions by the year 2045; this number will increase from 52% in 2021.

Offshore wind power is part of the plan to get there, which will call for the development of new technologies in the form of floating wind turbines. In December 2022, the federal government leased the first sites in the Pacific for offshore wind farms, with the intention of providing electricity to approximately 1.5 million residences. On the other hand, there are still years of technical and regulatory work to be done.

The concept places an emphasis on huge solar farms rather than residential rooftop solar installations since solar farms can be expanded more quickly and at a lower cost. During the same week that the revised scoping plan was made public, the Public Utility Commission of the state of California voted to significantly reduce the amount of money that homes are reimbursed for solar power that they transmit to the grid. This particular policy is known as net metering. The Public Utility Commission contends that the manner in which energy prices are established has resulted in substantial rooftop solar reimbursements disproportionately benefiting richer homes while simultaneously imposing higher electricity costs on others. It is confident that this new policy will result in a model that is both more equitable and more sustainable.

The problem of carbon capture for the industrial sector

The role that industry plays is more subordinate, and the policies and plans that are in place here are less developed.

The state's carbon cap-and-trade program will tighten its emissions limitations in order to achieve the program's overall goal of reducing total emissions while leaving individual businesses some leeway in their compliance.

However, despite the fact that cap-and-trade has been successful to this point, in part because it has resulted in the generation of billions of dollars that have been used to fund programs and incentives to reduce emissions, its role may shift in the future as energy efficiency improves and additional rules and regulations are put into place to replace fossil fuels.

Carbon capture and storage, also known as CCS, has been at the center of some of the most contentious debates throughout the whole process of developing the Scoping Plan. The contention that carbon capture and storage (CCS) enables fossil fuel facilities to continue producing pollution while only capturing carbon dioxide emissions is at the heart of the controversy. These establishments are frequently located in or close to low-income neighborhoods.

The likelihood of success for California

Will California make it? The state has a history of exceeding its goals, but reaching net zero emissions by 2045 will require a steeper downward trajectory than even California has experienced in the past, and there are still numerous obstacles to overcome.

Concerns over environmental justice regarding carbon capture and new industrial facilities, along with NIMBYism, could prevent numerous investments that are desperately needed. In addition, there is a chance that weak economic development may lead to cuts in spending, which might make worries about economic disruption and affordability even worse.

The state of California's emissions are decreasing, but not nearly quickly enough.

From a high point in 2004 to 2019 before the epidemic, the state's emissions of greenhouse gases have decreased by 16%. In order to get to zero net emissions by 2045, we will need to make a more significant reduction.

There are also concerns regarding economics and international politics. Will the spike in the price of batteries in 2022, which was caused by geopolitical tensions, a delay in extending the supply of crucial materials, and the conflict in Ukraine, turn out to be an isolated incident or the beginning of a new pattern? Will electric utilities be able to move quickly enough in order to create the necessary infrastructure and grid capacity in order to support the anticipated surge in the number of zero-emission automobiles and trucks?

It is encouraging to see that the state has already developed almost all of the necessary infrastructure for policymaking. Even if there will be a need for further tightening of emission limits and targets, the structure and policy mechanisms have essentially been put into place.

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