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California falling behind on emissions reductions despite clean energy job growth

Highlights

Annual 4.3% GHG decrease needed through 2030

ZEVs need 18% annual growth to meet 2025 target

Natural gas usage in homes, buildings up since 2014

Slowing renewable energy growth, underwhelming transportation sector gains and an overdependence on natural gas mean California is not making sufficient progress toward clean energy goals, said the 13th annual California Green Innovation Index that Beacon Economics prepared and nonpartisan nonprofit Next 10 released Dec. 14.

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Total greenhouse gas emissions dropped 1.6% between 2018 and 2019, the second-largest percentage decrease since 2010, but more is needed to meet the state's mandate to cut emissions 40% below 1990 levels by 2030, the report said. That means California must now sustain a 4.3% annual decrease through 2030, more than 2.5 times greater than was achieved in 2019.

"The Index this year shows California making some important gains after emissions increased in 2018, but even the second-largest emissions drop in a decade is not enough to overcome challenges related to transportation, overconsumption of natural gas in the power and buildings sectors, and the persistent threat of pollution from wildfires," F. Noel Perry, businessman, and founder of Next 10, said in a statement. "California needs to achieve sustained reductions on a scale we have never come close to. It's really a major test of our climate leadership."

Senate Bill 100 established the state's policy for 100% clean energy by 2045 and expanded the renewable portfolio standard to 60% renewables by 2030.

"We agree with the study's conclusion that climate programs need to reduce emissions more quickly," said Dave Clegern, California Air Resources Board spokesman. "We identified in the 2017 Scoping Plan that reductions needed to double in this decade to achieve our 2030 target of 40% below 1990 levels. That's why as of this year California has doubled the reductions it expects from cap-and-trade and the Low Carbon Fuel Standard and increased stringency in other programs to reflect the outcomes of the 2017 Scoping Plan."

Transportation section

Transportation section emissions, the state's largest source of greenhouse gas emissions, decreased 2.1% from 2018 to 2019 and remains at just over 40% of the total emissions, according to the report. The decrease was largely driven by a 7.5% drop in heavy-duty vehicle emissions and aided by a 1.5% drop in light-duty truck and SUV emissions.

While the total number of zero-emissions vehicles registered in California is growing, the adoption rate is not keeping pace with what is needed to meet California's target of 1.5 million ZEVs on the road by 2025, according to the report. In 2020, the number of ZEVs on California roads increased 11.6% from 2019, but to meet California's 2025 target the number of ZEVs registered will need to increase 18% annually, up from the previous 16.9%, amid falling pandemic ZEV sales.

Major policy developments over the past two years could lay the groundwork for a rapid acceleration in the transition to ZEVs. In 2020, Governor Gavin Newsom issued an executive order setting a target of 100% zero-emissions car sales by 2035.

"We are also moving ahead with the second phase of the Advanced Clean Cars Program, which requires a much steeper rate of transition to electric vehicles, in keeping with [Newsom's] Executive Order N-79-20, requiring an end to sales of new internal combustion passenger vehicles by 2035 and heavy-duty vehicles by 2045," Clegern said. "In addition, California is putting in place an extensive strategy to quickly reduce emissions from short-lived climate pollutants, such as methane and hydrofluorocarbons."

Natural gas usage

California met its target of 33% renewables by 2020, but the pace of California's renewable energy growth has slowed in recent years, according to the report. In 2020, the state added more natural gas capacity — 1.5 GW — than any other source. Generation from wind, solar, geothermal, biomass, and hydroelectric made up 45.3% of the state's power mix in 2020, down from 46.3% in 2019.

"To meet California's goal of 50% renewable energy by 2026, the state's share of electricity generation from renewables would need to increase by 2.8% annually," Patrick Adler, Beacon Economics research manager, said in a statement. "But the percentage of California's total power mix from renewable energy resources crept upward by just 1.4% in 2020 — driven largely by the retirement of older and less-efficient fossil fuel power plants, as opposed to the addition of new renewable energy resources. So, there's a lot of work to be done."

Natural gas usage in homes and buildings increased since 2014, up 15.3% in the commercial section and up 17.8% in residential homes, according to the report. Also, gas usage was up 19.8% since 2009 in the industrial sector.

California leads the nation with a series of state and local policies aimed at cutting gas use in new construction, but cutting gas use in existing buildings will be much more challenging, according to the report.

"Our Index shows that natural gas is quickly becoming California's Achilles' heel across sectors," Adler said. "Gas use is on the rise in buildings, even as our state leads the nation with policies to phase it out in new construction. In the power sector, we added more new gas generation than any other resource in 2020. To meet our climate targets, we need to reverse these trends, and quickly."