California's Groundbreaking Clean Energy Law Leads the Way

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Another in NRDC’s Year-End Review of 2014 Clean Energy Developments

Governor Jerry Brown, legislative leaders, administration officials, and climate activists gathered this week at the California’s Climate Leadership forum to discuss the future of California’s roadmap to decarbonize the world’s eighth-largest economy under the banner of the Global Warming Solutions Act (AB 32), a groundbreaking law that fostered an impressive array of developments this year.

As newly elected Senate President pro Tempore Kevin de León reminded the packed crowd, “The world is watching California.” But before we train our sights on 2015, let’s put down the eggnog for a moment to review the main events of a very busy 2014 for California climate policy.

Oil Industry Runs Out of Gas

The doomsday chorus otherwise known as Big Oil continued its assault on California’s clean energy laws in 2014 and, as in years past, largely came away with an empty stocking. The oil industry’s eleventh-hour attempt to be excused from mandatory pollution limits under California’s cap-and-trade program failed to get a vote in the Legislature, a series of legal challenges failed to persuade the courts, and a cash-infused campaign to prop up astroturf groups purporting to represent concerned Californians—exposed both in an NRDC report and a leaked presentation from the industry’s leading trade association—failed to gain traction.

But don’t expect Big Oil to disappear like this year’s wrapping paper. Come January 1, 2015, when oil companies for the first time will be held accountable for the carbon emissions associated with the products they sell, expect the high-carbon carolers to extend their nearly decade-long chorus.

Programs Gain Momentum

Meanwhile, California continued to forge ahead. The Air Resources Board (ARB), the agency tasked with implementing AB 32, completed the first update to the Scoping Plan, which details the array of policies California is pursuing to achieve its climate goals. The host of new initiatives includes a plan, which the Legislature codified, to put renewed emphasis on reducing supercharged climate pollutants like methane and black carbon that have a much larger warming impact (or “global-warming potential”) than carbon dioxide, the main contributor to global climate change. AB 32 requires carbon dioxide and other climate-warming pollutants to be reduced to 1990 levels by 2020.

California’s cap-and-trade program, which limits climate pollution from the state’s largest emitters, rounded out its second successful year. Emissions are down nearly 4 percent since the market launched, and the program achieved full compliance at its first due date, when emitters were required to turn in permits to match their emissions. After taking a mulligan, California completed the first joint auction of those permits with its inaugural trading partner, Quebec. The auction sold out of permits available for use both in 2014 and 2017, indicating market participants are increasingly confident the program will have more staying power than Aunt Gertrude’s fruitcake.

The auctions have now generated nearly $1 billion that by law must finance investments in emission-reduction projects and technologies, particularly in California’s communities hardest hit by air pollution. The first $19.5 million in funding was awarded to eight projects (five in disadvantaged communities) to support the construction and upgrade of facilities to keep more waste out of landfills through composting and recycling. According to CalRecycle, the administering agency for those grants, the projects will create up to 158 temporary construction jobs and up to 130 permanent jobs across the state. Add that to the more than 430,000 jobs already putting Californians to work building the clean energy economy, according to a new survey, with an additional 70,000 jobs planned during the coming year.

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But California’s cap on carbon is merely the bow on an impressive policy package. Thanks to the assortment of clean energy policies California is driving forward under AB 32, the state has registered more than 200 clean fuel pathways under the Low Carbon Fuel Standard, delivers more than 22 percent of its electricity with renewable resources (on its way to achieving the 33% Renewable Portfolio Standard by 2020), continues to scale up  energy efficiency, and has helped put more than 120,000 electric vehicles on the road, more than any other state.

2020 Is a Thing of the Past

With AB 32’s emissions reduction deadline in 2020 drawing near, California leaders are making plans to propose new targets in the year ahead to affirm the state’s commitment to decarbonizing its economy. Governor Brown endorsed the need for a 2030 reduction target at an address to world leaders at the U.N. Climate Week in New York City earlier in the year, and this week reminded us that while climate change poses immense challenges, “we have a habit of doing difficult things,” dating back to California’s enactment of landmark clean car standards and energy efficiency standards for buildings and appliances.

And lest the executive branch hog the mistletoe, legislative champions are lining up to carry the sleigh.  Senator de León took California’s success story to the U.N climate summit in Lima last week, where he touted the importance of pricing carbon to level the playing field between polluting fuels and clean energy and to fund critical investments and create jobs for working families. He is joined by Senator Fran Pavley, author of AB 32, who on the first day of the 2015-2016 legislative session introduced SB 32 (purely a coincidence, of course) to codify California’s long-term goal of reducing climate emissions to 80 percent below 1990 levels by 2050 and authorize ARB to propose interim targets to ensure the state remains on track.

With a 3-month-old in tow, those long-term climate targets took on renewed meaning for me this past year. Happily, California’s efforts got an important boost thanks to a potent one-two punch from Uncle Sam. June saw the release of the Environmental Protection Agency’s proposed Clean Power Plan (which would limit climate pollution from existing power plants, America’s largest source of emissions) and not long before the Lima summit, President Barack Obama announced a landmark agreement to slash carbon emissions with China (the world’s largest emitter).

But we have a long road ahead. My enduring holiday wish is that I’ll be able to regale my son, Lucas, many years hence, with tales of 2014 as the year we finally got serious about confronting the climate crisis that threatens our collective future. And California, like Rudolph’s red nose, led the way.

For now, back to the ’nog.