9: Lessons from California

Overview

This chapter introduces the steps that one climate change leader, California, has taken to reduce its greenhouse gas (GHG) emissions across a wide range of economic activities. Given the magnitude of the climate change challenge, it’s easy to conclude that brand-new or asyet-undiscovered mitigation and adaptation policies will be needed. But California’s experience shows that decades-old policies and programs designed to improve air quality and energy efficiency, as well as spur large-scale use of renewable power sources, can all be used to combat climate change. So, climate change policies are neither unknown nor untried; indeed, many of the required policies simply build on existing efforts that are widespread and well understood.

The chapter begins with some history, discussing how very poor air quality, especially in the Los Angeles basin, spurred activists, scientists, and policymakers to act. The chapter then focuses on California’s innovative climate policies. We do not aim to provide a comprehensive guide to all of the state’s efforts. Rather, we selectively review some of the most innovative and far-reaching policies, and chart the steady ratcheting up of its targets for greenhouse gas reductions and renewable energy. The first law explicitly requiring greenhouse gas reductions— anywhere in the country—targeted cars and other light-duty vehicles. The resulting regulations were adopted by 14 other states, accounting for almost 40% of US new vehicle sales. Later, the federal government worked with California to develop even more aggressive regulations. Thus, vehicle GHG emission standards were an early example of how California’s policies could spur climate action beyond its boundaries.

Subsequent laws went beyond the transportation sector to require economy-wide greenhouse gas reductions. Most notably, Assembly Bill 32 (AB 32), the California Global Warming Solutions Act of 2006, set a target of reducing greenhouse gas emissions to 1990 levels by 2020, which in practice meant a reduction of 25% to 30% below business-asusual emissions. A statewide vote highlighted the depth of California voters’ support for climate policy; a ballot measure that would have effectively repealed AB 32 lost by more than 2 million votes.

Section 9.3 analyzes one of the centerpieces of California’s plan to achieve the AB 32 target—cap and trade, which sets a limit on emissions and allows firms to trade emission allowances in order to reduce overall mitigation costs. California’s experience with cap and trade has generally been a success. Emissions have fallen while the state’s economy has prospered, and auctions of emissions permits have generated more than $10 billion for the state’s Greenhouse Gas Reduction Fund.

Despite the high-profile nature of cap and trade, California has also relied on more traditional “command and control” regulations and performance standards, as well as other types of market instruments, to achieve its goals. The energy sector is a case in point. The state has continued to expand requirements for utilities to generate a certain portion of their electricity from renewables—by 2045, electricity must be 100% carbon free—and set energy efficiency standards. These energy gains have resulted in a state whose carbon footprint, in tons of CO2 equivalent per capita, is much lower than that of the rest of the US, but still higher than the world average.

Section 9.5 discusses one area where the state’s climate policies have had more limited results—encouraging more transit-oriented land use patterns that reduce vehicle travel and emissions from the transportation sector. The state has no authority over local land use decisions— that is, what gets built where. These decisions are jealously guarded by cities and counties as their own prerogative and determine whether and how far California residents have to drive.

In the final section, we’ll go beyond AB 32, discussing how the state’s targets have gradually increased in ambition. A 2016 law (SB 32) enshrines a target of reducing GHG emissions 40% below 1990 levels by 2030, and a subsequent executive order from the governor sets an even more ambitious goal of carbon neutrality by 2045. A key conclusion is that the politics of the state are favorable to climate policy. The lack of coal reserves and limited heavy industry, together with a business community that benefits from clean energy and environmental protection, have ensured that climate mitigation rests on a broad base of support.